BYD outpaces Volkswagen to become China's top car brand
Volkswagen's been on top of the auto game in China for pretty much as long as China has kept track of this data.
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The backstory: Volkswagen's been on top of the auto game in China for pretty much as long as China has kept track of this data, with the automaker's chairman recently calling the country the "most important market for us." But, with the electric vehicle (EV) market in China blowing up and local car makers getting stronger and more sophisticated, foreign giants like Volkswagen, Toyota, Honda and Nissan are all feeling the pressure. With that, which local automakers are making a name for themselves, you ask? It's Chinese company BYD that's making waves in the industry big time.
More recently: Last year, BYD, which is backed by household name Warren Buffet, had a rockstar year, selling 1.86 million vehicles, which is more than what it sold in the past four years combined. In the backdrop, in 2022, China's retail sales of new energy vehicles, including fully electric and plug-in hybrids, nearly doubled to over US$5 million. Local giant BYD made up around 30% of those sales. But BYD wanted more and made its ambitions known, with Chairman Wang Chuanfu announcing his aim to beat Volkswagen by the end of this year.
The development: With that, BYD just snatched the crown from Volkswagen to become China's best-selling car brand in the first quarter of 2023, selling over 440,000 cars in China, according to Bloomberg industry data. On the other hand, Volkswagen sold 427,247 vehicles in the same period, with just 6% being EVs. BYD has said it aims to sell between 3 to 3.7 million cars this year.
Key comments:
"BYD is very, very strong," said Oliver Blume, CEO of Volkswagen, during an event at the Shanghai auto show this month. "In the end, not everything is about volume. We want to have a successful business, and it is more important to be the best international group here in China."
"BYD is adding pressure for other carmakers in the segment," said Tu Le, managing director of automotive consultancy Sino Auto Insights.
"BYD last year made more than US$2 billion after taxes in the auto business in China. It's incredible what's happened," said Charlie Munger, Berkshire's vice chairman and a Daily Journal board member at the Daily Journal's virtual annual meeting in February. "If you count all the manufacturing space they have in China to make cars, it would amount to a big percentage of the Manhattan Island, and nobody had ever heard of them a few years ago."
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