As the first major global auto show after three years of pandemic, this year's Munich Motor Show has attracted unprecedented attention. Another key reason is the heavy participation of Chinese automakers.

According to statistics, apart from European and American automakers like BMW, Mercedes-Benz, Audi, Volkswagen, and Ford, Japanese and Korean automakers were largely absent at the show. In contrast, Chinese OEMs including BYD, Avatr, Leapmotor, XPeng, Seres, MG, and Dongfeng Group participated, along with power battery manufacturers and software/hardware providers such as EVE Energy, Horizon Robotics, ECARX, and QCraft.

It's no wonder some Chinese media joked: “Germany sets the stage, China performs the opera.” US media reported: “The Munich Motor Show is no longer Germany’s home turf; it has become a personal show for Chinese automakers.” European media also noted: “BYD is gradually expanding into Europe by targeting key markets and building retail networks, becoming a major threat to European brands.”

After the Shanghai Auto Show, Chinese auto brands, absent from the international stage for three years, have once again become the focus of global attention. German Chancellor Olaf Scholz, in his opening speech, acknowledged the achievements of Chinese automakers in electrification, while encouraging German companies to be “inspired, not intimidated, by competition from Chinese electric vehicles.”

Among all exhibitors, BYD undoubtedly received the most attention. Not only did it command the largest booth at the show, but it also brought six new energy models: SEAL, Song PLUS EV Champion Edition, Yuan PLUS (overseas name BYD ATTO 3), Dolphin, Han, and Denza D9. More importantly, BYD is the world's first automaker to go all-in on new energy and the global leader in new energy vehicle sales. In 2022, BYD sold 1.8685 million vehicles, far exceeding second-place Tesla.

According to MarkLines data, in the first half of 2023, BYD's cumulative global sales of 1.2556 million vehicles surpassed Mercedes-Benz and BMW, entering the “global top ten automakers” for the first time. This marks two firsts in the Chinese auto industry: the first time a Chinese auto brand enters the global top ten, and the first time Chinese auto sales surpass those of joint-venture brands in history.

In addition to rapid sales growth, BYD's profitability has also improved significantly. According to its mid-year financial report, BYD achieved revenue of RMB 260.124 billion in the first half of 2023, up 72.72% year-on-year; net profit attributable to shareholders was RMB 10.954 billion, up 204.68% year-on-year.

Behind this profitability is BYD's amazing cost control ability. On the opening day of the Munich Motor Show, UBS Securities released a teardown report on the BYD SEAL, showing that about 75% of the SEAL's components are produced in-house. Compared to the Tesla Model 3, the BYD SEAL's production cost is 15% lower, and about 35% lower than Volkswagen's European-produced equivalent models.

This cost control capability reflects BYD's comprehensive strength in electrification technology and vertical integration. Even Renault CEO Luca de Meo said during the Munich show: “Chinese cars are clearly very competitive in the EV value chain.”

Such cost control allows BYD to be flexible. On September 6, BYD launched the SEAL DM-i, with an entry price under RMB 170,000, which was hailed by media as the “king of price fighters,” likely to put pressure on mid-range joint-venture sedans.

In overseas markets, however, BYD prices rival those of BBA. For example, the BYD SEAL (pure electric version) launched at the Munich show is priced at RMB 189,800–279,800 in China, while the two versions on sale in Germany are priced at €50,990 (approx. RMB 400,000) and €44,900 (approx. RMB 350,000).

The huge price gap between China and Germany reflects the rapid development of China's new energy vehicles and the slow pace of electrification in Europe.

“BYD's new energy passenger vehicles have entered 15 European countries, and we have partnered with high-quality local partners to open over 140 stores in the UK, Germany, France, Italy, Spain, etc., providing consumers with a more convenient and comfortable car-buying experience,” said BYD's European auto sales division general manager Shu Youxing. He added that as electrification accelerates globally, Europe has become an important market for new energy vehicles, and BYD will continue to deepen its presence in Europe by enriching its new energy vehicle lineup to meet diverse consumer needs.

As is well known, Europe, especially Germany, is the “high ground” of the global auto industry, home to luxury brands like BMW, Mercedes-Benz, and Audi, as well as ultra-luxury brands like Porsche, Rolls-Royce, Lamborghini, and Bugatti. The market is relatively saturated and is considered one of the hardest to conquer.

Entering the European market is a key step in BYD's overseas strategy, with far-reaching significance not only for BYD but also for Chinese brands going global.

1. Entering 15 countries with 145 stores: How is BYD deploying its overseas market?

BYD's overseas trajectory is basically synchronized with its domestic development. In 2021, BYD achieved a qualitative leap in domestic sales, selling over 740,000 vehicles for the year. In May of that year, BYD announced its “passenger car export” plan, starting with Norway.

In 2022, as the world's first traditional automaker to stop producing fuel vehicles, BYD's sales directly rose to 1.868 million vehicles. In February 2022, the BYD Yuan PLUS (also known as BYD ATTO 3) began pre-sales in Australia; in July, BYD officially entered the Japanese passenger car market, unveiling three models; in September, BYD launched the Han EV, Tang EV, and Yuan PLUS in the European market; in November, BYD launched the Song PLUS DM-i and Yuan PLUS in Brazil, covering many countries and regions including Southeast Asia, Europe, and the Americas.

Entering 2023, BYD's overseas expansion accelerated. In March, it held brand launch events in Jordan, Uzbekistan, and Madrid, Spain, and then completed the foundation-laying ceremony for a passenger car production base in Thailand, marking the start of wholly-owned factory expansion abroad.

It is reported that in 2023, BYD identified two main focuses: brand diversification, with the layout of the BYD brand (Dynasty and Ocean), Denza, Yangwang, and Fangchengbao, covering various segments from family to luxury and from mass to personalization; and the continued push of the overseas strategy, entering the UK, Spain, Jordan, and more.

In an interview at the Munich Motor Show, BYD's brand and PR general manager Li Yunfei said: “In just one year, BYD has signed cooperation agreements with many high-quality local dealer partners in Europe, such as the Louwman Group in the Netherlands, RSA in Norway, and Hedin Group in Sweden, quickly pushing multiple new energy models into 15 European countries, including Germany, the UK, Spain, Italy, France, the Netherlands, and Norway, with 145 stores.”

In Germany alone, BYD has cooperated with seven local dealers and has stores in 17 major cities, including Frankfurt, Hamburg, and Cologne. Li Yunfei also mentioned that BYD is currently expanding its European market in three aspects:

  • Product: BYD has launched five models in Europe within a year, offering European consumers an attractive diversified product choice.
  • Partnerships with local partners: In addition to the dealers mentioned, BYD shares technological innovations such as batteries, motors, and electronic controls with local supply chain and industry chain partners, helping stabilize the European market's industrial and supply chains, and also shares with downstream partners how to provide valuable car services to consumers.
  • Localization investment and layout: BYD is actively expanding localization investment and building a local talent team. With over 20 years of overseas business expansion experience, BYD has formed a mature international business and management team, accumulated rich operational experience, and gradually localized talents in various overseas markets.

2. Advancing the overseas strategy to become a global new energy auto company

As is well known, the nature of the auto product dictates that globalization is the only path. With the improvement of Chinese brand competitiveness, “going overseas” has become a necessary step for China to become a automotive powerhouse.

In the past year or so, we have seen Chinese brands going overseas becoming a new wave and growth point. However, “going overseas” is not easy; many companies can only start from Southeast Asian and South American markets. But obviously, only by successfully occupying those overseas markets with relatively mature auto industry chains can the Chinese auto industry have a say in the global market and truly elevate China to a automotive powerhouse.

Take the European market, the birthplace of the traditional auto industry. European auto brands are strong at home; data shows that four out of every five cars sold in Europe are locally manufactured. Over the past decade, Europe's auto trade surplus has been between €70 billion and €110 billion annually, making it the crown jewel of European manufacturing.

The Japanese market is also very “exclusive,” home to Toyota (the world's best-selling auto brand for many years) and other globally top-ranked brands like Nissan, Honda, and Mazda. Statistics show that Japanese brands have a 90% market share in their home market, while German cars hold a 64.8% share in Germany.

Now, BYD has successfully entered both markets. In Europe, BYD has “rooted,” launching multiple models and cooperating with local dealers. Not long ago, European mainstream TV station DW and German renowned auto media Auto Motor und Sport gave high praise to BYD's Atto 3 (Yuan PLUS) after detailed tests.

In fact, not only in Europe, the Yuan PLUS is popular in many countries and regions around the world. According to Bestselling cars blog, the BYD ATTO 3 has been the best-selling car in Israel for nine consecutive months and was the best-selling pure electric vehicle in New Zealand for the month.

With the addition of Dolphin, SEAL, and future Song PLUS EV and Denza D9, BYD's overseas sales are expected to increase further. According to the latest data, BYD new energy passenger vehicles have entered 54 countries and regions worldwide. Overseas monthly sales currently exceed 10,000 units. In the first half of this year, total overseas sales reached 74,289 units, far exceeding last year's full-year figure. In August, BYD's passenger car exports surpassed 20,000 units, reaching 25,000.

Some investment firms predict that BYD's passenger car exports in 2023 could reach 250,000 units.

For BYD, “going overseas” not only brings increased sales and profits but is also a necessary path to becoming a global auto company.

Conclusion

As BYD Chairman and President Wang Chuanfu said in the 2023 half-year performance meeting regarding the future market landscape: “This is an era of ‘fast fish eating slow fish,’ not ‘big fish eating small fish.’ If automakers don't move up in the next 3–5 years, they will lose their chance. For a company, core technology, a good strategic direction, and a rapid decision-making mechanism are key to winning.”

The “overseas strategy,” as one of BYD's two major strategies this year, reflects BYD's sense of urgency and long-term development. Whether it’s new product launches, cooperation with overseas suppliers and dealers, or plans to build factories, all demonstrate BYD's determination to strive for global No. 1.

Now that BYD has successfully entered the “global top ten automakers,” how soon can it reach the top three in the second half of the year? Worth looking forward to!