Sales profit double fall in the pain of BYD transformation

After a period of spurt and a taste of frustration, it may be a new topic for BYD's “Brand Year” to start again with adjustment frequency.

BYD, which actively promotes the construction of the "Brand Year," is suffering from a decline in sales volume.

According to the latest sales data, BYD sold 40,578 vehicles in October. Although it was 23% higher than the 33,085 units in September, it still experienced a 13% decline year-on-year, which was also the third consecutive month of negative year-on-year growth. At this time, the average growth rate of the entire industry exceeded 25%.

In spite of this, BYD is quite satisfied with the recent sales. "Compared with September, sales in October showed an increase of 23%, and the current momentum in November is still relatively good." Xu An, public relations manager of BYD Automotive, told Time Weekly: "The rebound in sales in October and It is not based on substantial price cuts. BYD's price system is now relatively stable."

Sales and profits plummeted

If you compare sales figures for 2009, it is not difficult to find that BYD’s main model F3 has already fallen from the miracle of sales of 20,000 per month. Since April of this year, the figure that we were accustomed to last year has basically been missed by F3. This "pillar" that can both impulse and guarantee profits can no longer conceal the weaknesses that have entered the end of the product life cycle. The G3, which is regarded as a BYD strategy model, has been hovering between three and four thousand.

Seeing only two months of sprint time this year, BYD's sales of 426,800 vehicles are still less than 75% of the 600,000 targets of the entire year. Wang Chuanfu's inner anxiety can be imagined, and this is clearly not the same as Buffett’s shareholder Buffett. See the result. At the end of September, during the “stock god” visit to China, he repeatedly emphasized the confidence in BYD’s future and his admiration for Wang Chuanfu himself, and it seems that in response to some doubts, Buffett travelled in BYD’s car throughout China.

However, Buffett’s full support did not promptly rescue BYD from the whirlpool of public opinion. On the contrary, the continued decline in sales volume has weakened the belief of some investors. “The dramatic drop in BYD’s profits has disappointed investors. After all, the current increase of other manufacturers is so obvious,” said Chang Changian, General Manager of Future Securities. “This suggests that BYD’s products may have problems.”

Data show that the third quarter of this company's net profit plummeted to 11.8 million yuan (about 1.78 million US dollars), compared to the same period last year, the figure was 1.16 billion yuan. On the second day of the performance announcement, BYD's share price in Hong Kong fell by 10%, setting the biggest one-day drop in the past two years.

It seems that it is not an easy task to maintain stable growth in the highly competitive Chinese market.

Into the high-end

After experiencing a growth of 100,000 to 200,000 and 200,000 to 400,000 yuan, Wang Chuanfu's "cross-border" move was affirmed, and the storm caused by F3 also let companies believe with confidence that this year will continue to double. Indeed, as the first work of BYD to enter the automotive industry, F3 brought over 50 awards to BYD, as well as admission tickets for “Monthly Bicycle Sales”. Since the 20th month after its listing in September 2005, the cumulative production of the F3 has reached 100,000 units, and the way it has adopted the sub-station has become another classic case of car marketing.

But five years after entering the market, this masterpiece of winning with low cost is also experiencing the cruel test of the market. For its sales decline, the industry even speculated that "F3 did not sell so much to consumers, but sold to dealers." In recent days, BYD dealers' retreat from the network has reflected another aspect that BYD is still not mature enough to build products. Analysts believe that BYD's extensive growth approach to the automotive industry has caused many problems and has directly led to the recent decline in BYD's performance.

Obviously, Wang Chuanfu also realized these problems. From the second half of this year, BYD has made frequent moves.

The first is the launch of the high-end model M6 in July, releasing the signal of BYD's transformation.

Although still imitating works, compared with the current best-selling MPV models such as the Buick GL8, Honda Odyssey and Toyota Previa, M6 13.98 million -23.98 million yuan price is still quite attractive. The deeper meaning is that BYD is using the M6 ​​to enter the mid-to-high-class sedan market with greater profit margins, which is absolutely beneficial to BYD's maturity.

Following the pace of M6, BYD launched the second strategic model of this year - the first coupe L3, 1.8LCVT configuration targets directed at the joint venture products, Beijing Hyundai Elantra, Shanghai General Motors New Excelle has become its catching target. According to the plan, BYD will launch i6, G6, and S6 one after another. The i6, which is positioned in the B-class car, will be the flagship model of the brand's most high-end model.

"The five models will assume 170,000 sales for the whole year," said Wang Jianyu, vice president of BYD's sales company. When the company formulated this new car strategy, it did not expect that its plan to double again would be hit, but also had to make a decision in August to adjust the 2010 production and sales target from 800,000 to 600,000.

Green skull

Despite the decline in sales, BYD said that there is no plan for large-scale promotion for the time being. The company still hopes to continue its strategy of “Brand Year” with little time left. Xu An believes that the goal of completing 600,000 vehicles is now not the focus of the company. "Packaging brands and integrating channels are our highlights."

As a company in the new energy field, BYD has always benefited from green marketing. The pain of the transition has also inevitably spread to this position.

Compared with other self-owned car companies, BYD has obvious advantages in electric vehicle technology, including F3DM dual-mode electric vehicles and e6 pure electric vehicles. These are new energy products based on the concept of green, even more unexpected. In May of this year, BYD formally joined hands with the global auto giant Daimler Benz to form a joint venture to jointly develop electric vehicle products in China. With Mercedes-Benz's influence in the world to enhance the brand's gold content, it can be said that BYD's brand year is a “sacrifice”.

However, under the huge propaganda effect, how many new energy vehicles can actually bring real performance and profits to enterprises, but it has not yet seen results. The latest figures show that the sales of F3DM and e6 in October were 42 vehicles and 2 vehicles respectively. .

According to industry insiders, in the short term, these green concepts will not be able to bring BYD's money, but they can save a lot of publicity costs for BYD. Does Buffett not only take stock of BYD’s potential in new energy and invest in stocks?

However, in order to sell more new energy vehicles, they can even compete with F3 and F0 in terms of sales volume. BYD’s needs in addition to the government’s support have long waits. Under the call of global energy conservation and emission reduction, large and small car companies will invest more energy and capital in the research and development of electric vehicles. If they do not maintain their advantages, BYD is at risk of being overtaken at any time. "More and more companies conducting electric vehicle R&D are a good thing for BYD, which proves that the electric vehicle market will grow bigger and bigger in the future," said Xu An. At the world electric car conference that opened on November 5th, BYD put forward a solution for the city bus electricization, that is to replace the ordinary fuel taxi with pure electric car e6, instead of the ordinary fuel bus, pure electric bus K9, “a rental The car is equivalent to the fuel consumption of 10 private cars, a bus equivalent to the fuel consumption of 30 private cars and the amount of sewage discharged. If the government subsidizes an electric taxi, the effect is equivalent to subsidizing 10 private cars. The social benefits to come. Subsidizing an electric bus to run on the road is also equivalent to the social effect of subsidizing 30-40 private cars.” Wang Chuanfu said in a speech at the conference. “The Chinese government is the most in short supply of oil. It is money. Our plan can fully enable the Chinese government to achieve it and it can also be done."

It seems that in the next 7 years, BYD has already brewed a more crazy idea.