BYD may stop manufacturing conventional petrol-fuelled cars within two years and concentrate on ‘new energy’ battery vehicles, as part of its plans to tackle deteriorating sales.
The company’s net profit dropped from CNY3.8bn (US$608.46m) four years ago to only CNY81.4m in 2012.
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According to Reuters, BYD is now focussing on internal plans to drastically adjust and possibly streamline its business, which covers batteries, LED light bulbs, mobile phone assembly, solar panels as well as electric and petrol-powered cars and buses.
Two senior executives at BYD said the company was considering discarding petrol cars and possibly offloading its solar panel business, to concentrate on new, greener battery technologies. One added: “We’re trying to reposition ourselves around what we do best”, making affordable advanced iron phosphate lithium ion batteries.
Over the next few years, BYD may decide to design ‘green’ electrified cars only, phasing out petrol models. The executives said migration of the product line-up was likely to begin in late 2013.
New hybrids and other models could hit US showrooms by as early as 2016. A part of the new line will see costlier all-electric battery cars, and heavily electrified plug-in hybrids.
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By GlobalDataOne executive said BYD used to give priority to volume and growth at the expense of quality but now chairman Wang Chuanfu spends more time guiding and urging managers to improve and invest in quality.
However, Automotive Foresight head Yale Zhang considers the BYD redirection a risky move that could drive the company into “serious trouble”.
“They either know something we don’t or they’re actually going to take a long time, over 5-10 years, to make this radical transition so that there’s little risk,” he said, partly referring to the possibility of major government incentives for conventional hybrids.
