BYD has its eye on America. At the moment, its entry into the United States is almost impossible but its expansion plan not only targets the country that has tried to build a wall against Chinese car manufacturers. The Chinese company has set its sights on Canada. But also further south, in Mexico. And much further south, in Argentina, with a project that crosses the entire continent.
100,000 cars. According to Stella Li, vice president of BYD worldwide, this is the volume of cars that Mexico and Argentina have demanded that the Brazilian factory export to them. According to Chinese media, this volume of orders is distributed equally, with 50,000 cars for each country.
The export order for the Brazilian factory demonstrates the growing interest in both countries for BYD plug-in vehicles. He’s not the only one. In Brazil alone, BYD sold 113,000 cars last year, making the country the country that bought the most cars from the company outside of China.
A factory is key. Since last summer, BYD has been producing cars in Brazil with a clear focus on South America. There it produces the BYD Dolphin Mini (what we know in Europe as BYD Dolphin Surf) and will share facilities with the BYD Song Pro and BYD King, plug-in hybrid options.
The plant, which started with controversy after working conditions close to slavery were reported during its construction, has the current objective of producing 150,000 cars each year but is capable of expanding the volume to 600,000 cars per year. The investment, therefore, is strong.
At the moment, production has begun in the SKD version, with kits that arrive partially assembled, as is happening in Barcelona with the Chery Group, but according to BYD the objective is for production to be completely local over the years.
From Mexico to Argentina. In Bloomberg They explain that the plant will be the central industrial hub of the entire continent for BYD. The company started with a production of 150,000 cars per year and planned to expand its capacity with a second phase to 300,000 cars. However, last October they announced that they plan to double this figure and reach 600,000 cars manufactured per year.
Expansive plans in America are key for BYD. The company is seeing its sales slow down in the local market. In China, the State has withdrawn aid for the purchase of “new energy” vehicles (plug-in hybrids and electric vehicles), which directly impacts a company like BYD that has no other alternative in its range. Added to this is that the State has been trying for years to mobilize local consumption, which declines without this aid.
The news coming from outside China indicates in Blomberghave been good news for the company whose shares have begun to rebound after a sustained fall.
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The Mexico case. Looking ahead to its expansion, BYD has set its sights on Mexico. In fact, Chinese manufacturers have been gaining great popularity in the country. enough so that the Government, in a clear nod to the United States, has lifted tariffs of 50% on these cars. A strategy that, for the moment, has been unsuccessful in its early stages because these companies had already exported cars in very high volumes.
However, BYD has the best tool in Brazil to continue selling in Mexico. Both countries have a special treaty that allows them to take cars from one country to another without paying tariffs along the way. The company planned to build a factory in Mexico, which it also wanted to use as a back door for shipping cars to the United States. With the closure of this border and the tariffs already imposed on Chinese cars (and those to come), BYD ended up scrapping its plans.
The Argentina case. As we said, Mexico and Brazil are not the only two attractive markets for BYD. Argentina has become another vein that, supposedly, has demanded the importation of 50,000 Chinese cars. In Infobae They point out that this figure is equivalent to 10% of Argentina’s annual vehicle production.
Until now, the Argentine market has been highly regulated in its imports but it has opened up. This has increased imports by 97%, making it more important than ever for companies to export outside their borders (they already do so by 90%). However, they are seeing how the reception capacity in countries like Peru or Ecuador is lower because Chinese vehicles are also beginning to enter these markets.
At the moment, tariff-free imports to Argentina are based on quotas. Quotas that, of course, are 50,000 units, which are exactly what BYD plans to send to the country from Brazil.
An eye on Europe. But, in addition, the Chinese company says it is not only interested in America. In presenting all these figures, BYD also assured that it had one eye on Europe. And with the progressive link between Mercosur and Europe, it will be easier to import cars to Europe economically.
It remains to be seen, however, if BYD is compensated for the efforts it has to make in terms of homologation to bring cars from Brazil. And tariffs are one thing and security obligations are quite another.
Despite this, the company may have an opportunity if it manufactures pick-ups for America, widely purchased in the region but with very low performance in Europe, so it can compensate for its exports so as not to have to dedicate specific assembly lines in our soil for a marginal type of vehicle.
Photo | Jimmy Woo, BYD and Nicolás Flor
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