Automaker projects "knockout" scenario for smaller brands and bets on factories in Brazil and Europe to maintain scale
The Chinese automotive market, the world’s largest hub for electric vehicles, has begun a restructuring process that should result in a drastic reduction in the number of manufacturers and production units. BYD, the current leader in the sector, projects that the next five years will be marked by a “cleansing” in the domestic market, driven by saturation of demand and the end of government incentives.
According to Wang Chuanfu, president of the automaker, the sector has entered a “knockout” phase, where only companies with large scale and production efficiency will be able to survive the intense price war. In 2023, the brand reached the historic mark of 3.02 million vehicles sold, but the slowdown scenario in China raised the alert for the need for geographic diversification.
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To mitigate exposure to fluctuations in the local economy, BYD has set the goal of balancing its trade balance by the end of 2026. The goal is for the volume of exports and sales of vehicles produced outside China to correspond to 50% of the company’s total revenue. The strategy aims to transform the brand into a global powerhouse less dependent on a single consumer market.
Industrial expansion is the pillar of this change. Currently, the manufacturer operates units in Brazil, Thailand and Uzbekistan, and is preparing the inauguration of a plant in Hungary to serve as a gateway to the European market. By producing locally, the automaker also seeks to circumvent tariff barriers and reduce logistics costs, consolidating its presence in regions with growth potential higher than the saturated Chinese scenario.
