Compared to its excellent performance in China's domestic market, BYD's performance in the European market is still lackluster.
Despite the slowdown in the growth rate of BYD's new energy vehicle sales, the slowdown in the development of the European pure electric vehicle market, the slow progress of BYD in capturing the European market share, and the possible obstacles caused by the EU countervailing duties, BYD's determination to conquer Europe has not diminished in the slightest.
Recently, BYD released its 2024 semi-annual report, BYD's revenue in the first half of this year was 301.127 billion yuan, a year-on-year increase of 15.76%, of which, the business revenue of automobiles, automobile-related products and other products was about 228.317 billion yuan, a year-on-year increase of 9.33%, and this part of the business accounted for 75.82% of revenue; the net profit attributable to the parent company was 13.631 billion yuan, a year-on-year increase of 24.44%; The gross profit margin was 20.01%, a year-on-year increase of 1.68%, of which the gross profit margin of the automobile business was 23.94%, a year-on-year increase of 3.27%.
In terms of automobile sales, the report said that according to the data of the China Association of Automobile Manufacturers, in the first half of 2024, BYD's new energy vehicle market share will further increase to 32.6%, winning the domestic automobile sales championship and ranking first in global new energy vehicle sales. In the first half of this year, BYD's new energy vehicle sales reached 1.613 million, a year-on-year increase of 28.46%, lower than 95.78% in the same period last year, and also lower than the domestic new energy vehicle sales growth rate in the first half of this year. According to the China Association of Automobile Manufacturers, from January to June 2024, the sales of new energy vehicles increased by 32% year-on-year, and the growth rate was 44.1% in the same period in 2023, 1.2 times in the same period in 2022, and 2 times year-on-year in the same period in 2021. While BYD maintained growth in sales, revenue and profit, it is facing a significant slowdown in the growth rate of China's domestic new energy vehicle sales and BYD's new energy vehicle sales.
Instead of a slowdown, the European market is facing a deceleration. According to the European Automobile Manufacturers' Association (ACEA), in July 2024, the number of new registrations of pure electric vehicles in the EU decreased by 10.8% year-on-year, while its market share fell to 12.1% from 13.5% last year, although Belgium, Netherlands and France all increased, but could not offset the 36.8% decline in the Germany market. From January to July 2024, the market share of newly registered electric vehicles (BEVs) was 12.5%, while plug-in hybrid electric vehicles (PHEVs) also declined, falling to 6.8% from 7.9% in the same period last year. Hybrid electric vehicles (HEVs) saw an increase in registrations, up 25.7% year-on-year, and their market share increased from 25.5% to 32%. Let's look at the Germany electric vehicle market that BYD attaches great importance to. According to Germany's Federal Automotive Agency (KBA), from January to July 2024, the number of new registrations of pure electric passenger cars in Germany decreased by 20.1% year-on-year, and the proportion of total passenger car registrations fell from 16.4% to 12.6%.
Compared to the pretty good figures in China, BYD's performance in Europe is still lackluster. According to data from the Germany Federal Automotive Agency, in 2023, BYD registered 4,139 passenger cars in Germany, accounting for 0.15% of all passenger car registrations. In July 2024, BYD registered 230 passenger cars in Germany, with a market share of about 0.1%. From January to July 2024, BYD registered 1,432 passenger cars in Germany, accounting for about 0.08% of the total passenger car registrations, accounting for about 0.4% of the new energy passenger vehicles (including pure electric and plug-in hybrid) registrations, and among the 1,432 BYD passenger cars, 1,386 were pure electric vehicles, accounting for 0.6% of the total registration of pure electric passenger cars. BYD's market performance in Germany is far below its average performance in Western Europe. According to Schmidt Automotive Research, in the first half of 2024, BYD registered 16,112 pure electric vehicles in 18 Western European markets (member states that joined the European Union before 2004, Norway, Switzerland, Iceland and United Kingdom), with a pure electric vehicle market share of 1.7%. Whether in the Western European market or the Germany market, BYD's market share is still quite far from what it wants to achieve.
Despite the four "although" mentioned in the opening chapter, BYD's series of actions this year have shown its determination to gnaw on the hard bone of Europe. BYD's 2024 semi-annual report lists its actions to accelerate its overseas market layout: With the acceleration of the globalization of the passenger car business, BYD is actively promoting the localization of production. In January, the Uzbekistan plant started production, and the first batch of mass-produced new energy models Song PLUS DM-i Champion Edition officially rolled off the production line in June. At the same time, to build a self-operated fleet, also in January, BYD's first automobile transport ro-ro ship made its maiden voyage successfully, marking a new stage of BYD's overseas market expansion. In addition, we will promote the construction of factories in Thailand, Brazil and Hungary, cooperate with many global high-quality distributors, and increase brand building and publicity. At present, from January to August 2024, BYD's overseas NEV passenger vehicle sales account for 11.4% of its total NEV passenger vehicle sales.
According to the United Kingdom Financial Times, at an event held by the media in May, Shu Youxing, general manager of BYD's international cooperation division and European automotive sales division, said that BYD plans to invest heavily in European factories, dealers and marketing.
First, in January this year, BYD's first car ship "BYD Explorer 1" started its maiden voyage to Europe, and then made a high-profile appearance as the official partner of the 2024 European Cup. When I watched the Euros TV live in mid-June and mid-July this year, I also paid special attention to the billboards of BYD in the stadium. What is puzzling is that BYD's advertising slogan uses NEV (new energy vehicle) expression, not the familiar EV or German Elektroauto that Europeans and Germans are familiar with, I specifically asked Germans who watched the game together, and none of the respondents noticed the advertisement during the game, and no one knew exactly what NEV stood for. In July 2024, the month when BYD's advertising as the official travel partner of the European Cup can have an effect, BYD registered 230 passenger cars in Germany, with a market share of about 0.1%.
In terms of long-term strategy in Europe, BYD has increased brand building and publicity, and in the short and medium term, BYD is currently trying to seek a breakthrough in sales. In early August, BYD's first dealer store in Poland officially opened; At the end of August, according to Reuters, BYD and its European dealer Hedin Mobility announced that the latter sold its subsidiary Hedin Electric Mobility, the dealer of BYD cars in the Germany market, to BYD. In other words, BYD is ready to take charge of its sales in Germany. BYD will also take over two stores in Stuttgart and Frankfurt, operated by Hedin Mobility. The transaction is still subject to approval and is expected to materialize in the fourth quarter of this year.
From the cooperation between the two in Germany two years ago to today's separation, this move is interpreted as BYD's dissatisfaction with its sales data in Germany, but from another perspective, this acquisition also reflects BYD's search for a shift from passive to active in sales.
In the medium and long term, the key is to localize production. In Shu Youxing's words, "Transporting cars from China to Europe is not a long-term plan, the long-term plan is to localize production." In December last year, BYD announced the construction of a new energy passenger car production base in Hungary, becoming the first Chinese automobile company to build a passenger car plant in the European Union. At the United Kingdom Financial Times event in May, Shu Youxing revealed that it will prepare to select a site for the second passenger car factory in Europe, and said that BYD aims to surpass Tesla and European local automakers by 2030 and become the largest battery electric vehicle seller in Europe. What a big ambition.