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BYD says Chinese cars headed to U.S. in late 2015

Bloomberg
January 6, 2014 - 2:16 pm ET

Chinese cars are poised to begin hitting U.S. showrooms by as soon as next year. BYD Co., the Chinese automaker backed by Warren Buffett's Berskshire Hathaway Inc., plans to introduce about four models for its U.S. debut at the end of 2015, said Stella Li, the senior vice president in charge of the company's U.S. business, in an interview last week.

Though BYD wasn't ready when it earlier sought to enter the U.S. car market in 2010, the company is more prepared this time, she said.

"Back then, we had passion, but we had no brand, no history, no capital and no competitive advantage," said Li, 43, who spoke at BYD's headquarters in Shenzhen in China's southern Guangdong province. "BYD has become more fashionable and we have improved our design and safety. We don't want to compete on price anymore, but on quality and innovation."

BYD's U.S. ambitions, echoed by companies from Geely Automobile Holdings Ltd. to Great Wall Motor Co., show how the Chinese are preparing to shake up the U.S. car market as the Japanese and South Koreans did decades earlier.

"Entering the U.S. market carries more symbolic meaning to brand building than actually boosting its bottom line," said Han Weiqi, an analyst with CSC International Holdings Ltd. in Shanghai. "They really need to make sure cars they deliver there have sound quality in order to avoid adverse impact."

Still, BYD has a track record of planning bigger than what they can actually deliver, Han said.

BYD is returning its sights to the United States after billionaire founder and Chairman Wang Chuanfu completed a three-year reorganization 2013, during which he cut the number of dealerships and narrowed losses at its solar business thanks to state incentives.

Restructuring plan

Investors have been receptive to BYD's turnaround. The company, which focuses on electric cars, saw its shares surge 63 percent to HK$38 in Hong Kong trading last year. During the restructuring, profit tumbled 97 percent because of losses at its photovoltaic business, a decline in global battery demand and a slump in auto deliveries.

Even with last year's gains, BYD's share price remains less than half the level of the record HK$85.50 reached in October 2009. That's still profitable for MidAmerican Energy Holdings Co., a unit of Buffett's Berkshire Hathaway, which bought 9.9 percent of BYD in 2009 for HK$8 a share.

U.S. market

Technically BYD is already in the U.S. vehicle market, though it sells electric buses to fleet operators, instead of cars to consumers.

The company is preparing to begin U.S. production of electric buses in March at its factory in Lancaster, Calif., according to Li.


Read more: http://www.autonews.com/article/201...ars-headed-to-u.s.-in-late-2015#ixzz2pgptimf8
 
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