The Chinese electric carmaker is interested in turning itself into a popular company, like Tesla
On April 11, 2016, the Chinese electric carmaker ‘Build Your Dreams’ (BYD) launched its recent compact SUV version in a lights-and-dance show in Beijing, as the company tries to replicate Tesla-like fame to battle in a competitive market.
BYD’s car ‘Yuan’, named after the 13th century Chinese empire built by defeating Mongols, has a starting price of $9,250 (59,900 Yuan) for the gasoline-engine model. It arrival – before the Beijing Motor show, which is scheduled to be held later in April – marks the entrance of BYD into the entry-level SUV niche famous among single professionals and younger urban families.
BYD is perhaps well known internationally for raising money from Warren Buffett’s Berkshire Hathaway, which has turned branding into topmost priority for the upcoming 2 to 3 years, the senior vice president of the company, Stella Li spoke while being interviewed.
While comparing the Chairman of the Chinese automaker ‘Wang Chanfu’ to a long-distance runner and CEO of Tesla ‘Elon Musk’ to a short-distance runner, she acknowledged the inability of BYD to lure a large number of customers towards its retail outlets waiting for its vehicles.
By naming its versions after various Chinese designs on Dynasties line, the organization is developing itself in a manner that differs from other automobile manufacturers that use names and letters to denote their line-up, such as Mercedes-Benz S-class, BMW 3 series and Audi A6.
At the same moment, the Buffet-backed organization takes a risk by establishing a brand name too much tied to the culture of China that it booms just a little in markets abroad.
Chinese automakers, like Japanese and Korean brands before them, are not able to easily improve their reputation and move beyond images for developing utilitarian and cheap automobiles sometimes alleged of slashing off more developed rivals.
For BYD, a mass-market reputation weakens its ability to differentiate its brand-image and charge a premium. As the largest manufacturer of Chinese EVs, the company is susceptible to be taken out of the topmost end of the automobile market by organizations like Tesla by its cult-like appeal for which customers pay a premium price.
At the low end, many minor manufacturers are battling on price. A number of organizations, many without vehicle-manufacturing experience, also have claimed to develop connecting EVs as the government of China has persuaded tech organizations to improve the conventional automotive industry.
“With the increasing size of the new-energy vehicle pie, many players are coming in and the industry will enter a period of reshuffle,” Chairman Wang stated on April 11, 2016. “We are thinking about what we should do going forward every single day."
The popularity of the Californian EV maker and the China’s expanding set of EV rivals are pressuring BYD, said Steve Man, an analyst based in Hong Kong covering the automobile industry at Bloomberg intelligence.
“Elon Musk’s recognizable fame and success as an entrepreneur makes him a strong voice for Tesla,” Wang stated. The shares of the US organization have jumped by 19% in 2015, while the Buffet-backed organization’s shares have declined by 15% in HK trading.
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