Will BYD succeed in Pakistan?

In 2011, Tesla CEO Elon Musk mocked the Chinese car company BYD saying that the company does not make good cars.

But as they say in English, Look who has the last laugh, BYD is no longer a ‘cheap Chinese product’ company, but is beating Tesla in every department, be it the design of the car, the interior. Be it quality, or technology. After which Elon Musk was also forced to take a uterus.

In the last quarter of last year, Tesla sold 484,000 electric vehicles, while BYD sold 526,000 vehicles, beating Tesla in its own field.

The same BYD has recently knocked the door of the Pakistani market and is going to introduce electric vehicles in collaboration with the Pakistani company ‘Mega Conglomerate’.

The vehicle market in Pakistan is very limited compared to developed countries. If you stand on the side of a busy road and start counting vehicles, about 95 out of 100 vehicles will be seen from only three companies. These companies have completely captured the Pakistani car market in the last thirty to forty years.

In the last five or six years, a few new car companies have entered Pakistan, but currently there are no signs of weakening the stranglehold of the ‘Big Three’, the main reason being that most of the vehicles of these new companies are in terms of Pakistan. are much higher than, i.e. close to or above a crore, so they could not find public acceptance.

But BYD is different from these new companies. The main reason is that BYD is planning to launch a fully electric vehicle, not a petrol or a hybrid. In Pakistan currently only one company DFSK has introduced an electric vehicle called ‘Serius’ but atleast in Islamabad I have not seen this vehicle on the roads.

BYD also has another advantage over DFSK, which is that BYD has introduced electric vehicles to the global car market, and if it becomes China’s first car with international reach. It may not be wrong if it is declared as a company.

Apart from this, BYD also has affordable vehicles, which they can introduce in Pakistan to make them popular in the local market. For example, BYD’s cheapest electric vehicle is the ‘Seagull’, which costs 27 lakhs in Pakistani rupees.

Chinese electric car maker BYD Auto’s Seagull car at the Bangkok International Motor Show on March 27, 2024 (AFP)

Being electric, the taxes and duties on it will be low and if this car comes to Pakistan even at 35 lakhs, it can be expected to be snapped up.

Compared to this, the cheapest electric vehicle in Pakistan at present is the ‘Serius’, which is priced at Rs 83 lakh.

BYD’s tsunami

While Mercedes, Ford, Toyota and other car companies have a history of more than a century, BYD’s history as a car company goes back only 21 years.

BYD was born in 1995, not as a car company, but as a battery manufacturer.

However, at that time its name was Yadi Electronics because it was established on Yadi Road. But Yadi was too low in the alphabet, so the company changed the name by adding the B as it is. Later, the international market slightly changed the same ‘Bayadi’ to BYD and started saying that it is an abbreviation of Build Your Dreams.

In the beginning, this company made mobile phone batteries in a small street in Shenzhen city. Initially, it had only 20 employees and the company’s owner, Wang Chuanfu, started it with a capital of only three and a half million dollars.

But BYD’s batteries became so popular that gradually it started getting international orders. There were two reasons for this: BYD used to reverse-engineer Japanese batteries at the time to make similar batteries, which were five times cheaper than batteries from Japanese companies Sony and Sanyo, and secondly, the quality was somewhat lower. There was not much difference.

Both Sony and Sanyo also sued BYD for copyright infringement but to no avail.

However, the result was that by 2002, BYD had become the fourth largest battery manufacturer in the world.

By this time, BYD apparently had no intention of entering the car market. Then in January 2003, BYD CEO Wang Chuanfu suddenly bought Shenzhen Car Company (7), even though the company’s own board of directors opposed it, because Shenzhen was close to bankruptcy and he wanted It looked like a losing trade.

But BYD soon became so good at making cars that in 2005 its ‘F3’ became China’s best-selling car (4).

American entrepreneur Warren Buffett, known as a visionary investor,

His vision can be gauged from the fact that he invested 230 million dollars in BYD after seeing the potential of an unknown small Chinese car company.

This also encouraged Chinese investors and started pouring capital into BYD.

After that, BYD never looked back.

CEO of BYD Company during a press conference in 2023 (Alexander-93 – CC BY-SA 4.0)

The founder of the company was born to a farmer

Now let’s come to the CEO of the company, Wang Chuanfu, whose story is very interesting as well as very inspiring. He was born in 1966 in a poor farmer’s family. Both parents died while still in school, leaving Wang to be raised by his older sister and brother.

But Wang did not give up and continued his education and after completing his master’s in chemistry, he was able to found BYD with 350,000 dollars and 20 employees at the age of 29.

Mention must be made of Wang Fan Chu who comes to office at nine in the morning and goes home at 11 at night.

A view of BYD’s factory in Shenzhen province on January 27, 2009 (AFP)

What is the secret of BYD’s success?

Wang Chuan Fu has introduced a strict work ethic to the company. According to a CNN report, the company’s employees often sleep there and their lives are just work and work. BYD has hired tens of thousands of engineers who are paid less, but they are no less skilled than the million dollar salary employees of any major company in the world.

Also, unlike other car companies, BYD manufactures most of its vehicle parts itself. This improves quality and reduces cost.

Another reason for BYD’s success is that it has the full backing of the Chinese government. Wang himself is a member of the Chinese Communist Party and attends its meetings.

This is the reason why BYD gets huge subsidy from the government.

According to a CNBC report, BYD received $4.3 billion in government subsidies between 2015 and 2020.

Besides, BYD’s business is very diversified and dynamic. Even if it has a deficit on one side, it has the ability to make up for it on the other side. It not only makes batteries and cars, but also ventures into semiconductors, trains, shuttles and forklifts, all of which are growing quadrupled overnight.

Not only this, but apart from making electric vehicles, BYD is also making petrol, hybrid and hydrogen vehicles. Simply put, BYD has not put all its eggs in one basket.

Due to these qualities of diversity, dynamism and work ethic, it can be expected that BYD will succeed in the Pakistani market and break the monopoly of the Big Three, which could not be done by other companies. Quality vehicles equipped with modern technology can be made available to Pakistani people at a reasonable price.