As the most successful car company in China in 2023, at BYD's 2023 annual financial report investor communication meeting, BYD Chairman Wang Chuanfu interpreted the company's strategic plan for 2024. Among them, BYD's sales target of 3.6 million units in 2024 is the most interesting.
Compared with the growth rate of more than 60% in 2023, on the surface, the year-on-year growth rate of 20% in 2024 seems to have dropped a lot. But if you take into account BYD's current planned production capacity of about 3.5 million, it would be great if this year's sales target of 3.6 million could be achieved. Once BYD can achieve sales of 3.6 million, then there will be great pressure on domestic car companies.
Is the Glory Edition the last straw that crushes the joint venture car companies?
This year's price war in the domestic auto market was actually initiated by BYD.
After sales were unexpectedly overtaken by Geely in January, BYD offered the killer feature of the Glory Edition. In the case that the champion version of last year has made the joint venture car companies very uncomfortable, the launch of the glory version of the Qin PLUS/Destroyer 05 Glory Edition from 79,800 has helped BYD quickly stabilize terminal sales, and in March, it topped the domestic car sales list again with a score of more than 300,000 units, and opened a big gap with the competitors behind it.
At the financial report investment communication meeting, Wang Chuanfu even proudly said that he would reduce the share of joint venture car companies from the current 40% to 10% in 3-5 years.
There is no doubt that BYD's strategy is becoming more and more radical from last year's "oil and electricity at the same price" to this year's "oil is more expensive than electricity". Helping new energy vehicles to gain more share from fuel drivers has become the most solid support for BYD's continuous sales growth this year.
However, it is worth BYD's attention that the Chevrolet Explorer equipped with SAIC-GM's self-developed plug-in hybrid system is about to be launched, and SAIC Volkswagen also has news that it is developing its own plug-in hybrid system. Whether it can divert part of BYD's sales to itself in terms of terminal sales and stabilize SAIC-GM's terminal sales will become an important vane for the domestic automobile industry this year.
If SAIC-GM's plug-in hybrid system can't shake BYD's sales, then the future of the joint venture will be dangerous in the domestic market.
However, before the advent of the more competitive plug-in hybrid models of the joint venture automakers, the joint venture automakers are not having a good time in the domestic market. In particular, the Qin PLUS DM-i Glory Edition directly diverted the sales of a large number of traditional joint venture car companies in the A-class sedan market, which caused the sales of many domestic foreign car companies to fall off a cliff.
It has even been rumored that Nissan and Honda, two major Japanese automakers, plan to cut the annual output of their Chinese factories by about 30% and 20% respectively. In order to avoid the collapse of the entire industrial chain caused by too much pressure on the dealer. A model like the Honda Fit, whether in terms of price, configuration, or even in the energy-saving performance on which Japanese cars rely the most, has no advantage in an instant before the Qin PLUD DM-i Glory Edition.
Where is BYD's potential?
For BYD, in addition to continuing to launch the Dynasty and Ocean series with more advanced performance and lower cost to consolidate the domestic market, the following two areas have become important sources for BYD to increase sales and profits.
High-end car market
In addition to the Dynasty and Ocean series, BYD has also laid out three other brands: Denza, Equation Leopard and Yangwang. The positioning of these three brands is not low, but at present, only DENZA can contribute to the sales of more than 10,000 per month. At present, the monthly sales of the Yangwang brand remain at 1,000-1,500 vehicles.
For a brand priced at more than one million, it is actually very difficult to expect such a result. In the next step, BYD will still spend more effort on the two brands of Denza and Equation Leopard to strive for greater sales. This can not only help BYD enhance its brand appeal, but also improve the gross profit margin of bicycles.
Overseas markets
In the past two years, BYD's determination to lay out overseas markets is very great. In 2023, BYD exported more than 240,000 units, and in 2024, BYD aims to sell 500,000 units in overseas markets, and plans to increase it to 1 million units next year. Compared with overseas car companies, BYD's advantages are still very obvious in terms of product strength and cost control.
In order to break the potential trade ratio, the construction of a series of overseas factories, including the Hungarian factory, has become the biggest support for BYD's entry into the European market.
In the overseas market, in addition to helping BYD increase sales, more importantly, the overseas market that is not so volatile has brought considerable revenue to BYD. According to data, BYD's export performance of 240,000 units in 2023 will account for 12.5% of the annual sales, but the overseas revenue of 160.222 billion yuan brought by it accounts for 26.6% of the company's total revenue.
Core technology
At the communication meeting, Wang Chuanfu also officially announced that BYD will also focus on the NOA pilot function and the new generation of batteries.
Among them, the new Denza N7, which was just released in April, will be equipped with BYD's urban NOA function. For BYD, in addition to investing resources in intelligent driving, it has also reached cooperation with Nvidia and Momenta.
In foreign countries, many car companies have long had similar functions on mass-produced models. Before it can achieve the function of L4, BYD will also catch up with Huawei and other new domestic forces in this area by continuing to deploy NOA. In the field of batteries, in addition to optimizing blade batteries based on lithium iron phosphate, BYD will also launch various high-energy-density battery technologies, including solid-state batteries, to better serve its high-end brands.
Compared with Geely, Chery, Great Wall and other independent brand car companies in the domestic market, BYD has a deep understanding of the vertical integration capabilities in the field of electric vehicles. At the same time, BYD has a much richer product matrix than Tesla, and its advantage is in the new energy vehicle market below 200,000 yuan.
Next, whether it is with the launch of a new generation of DM plug-in hybrid technology, or slowly making up for the shortcomings of intelligent driving, BYD's high sales growth trend will be further consolidated in the next few years. As for who can pull BYD down, we still have to see whether other independent brands can join hands with battery companies to subvert the technical route of lithium iron phosphate batteries.
If this result cannot be achieved, then BYD's throne will be difficult to shake, and its advantage is even higher than the first camp composed of North and South Volkswagen and SAIC-GM in the era of fuel vehicles.