• Dec 27th 2008 at 3:41PM
  • 24
Every major automaker glommed onto the Chinese market as its last best hope for growth when the previously-untapped market suddenly started buying cars. However, all of those operations are partnerships with local Chinese companies and those companies have been trying to learn the car business from the established players. Everyone's biggest fear has been that the Chinese would reach a point where they no longer needed the partnerships. In the last couple of decades, Chinese companies have taken over a significant portion of the world's manufacturing and automakers are terrified they will take over their business as well.

BYD is one of the more aggressive Chinese manufacturers. The company's plug-in hybrid, the F3DM, went on sale in China earlier this month and BYD had planned to introduce plug-in hybrid cars in Europe and the US in 2010. However, that plan has now been pushed back by at least a year. BYD has not explained why it has delayed exporting its hybrids. However, the serious decline of the automotive markets in Europe and the US may be a big part of the reason.

[Source: Reuters]

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    • 1 Second Ago
      • 6 Years Ago
      to JPM

      the change from oil to electricity in automobile is a event will play out in decades, i would not even read the oil price of the moment.
      • 6 Years Ago

      there is no "Endemic cheating" in China now or in Chinese culture in general. there are a few high profile cheating cases the west media chose to report.

      the west did not get today's regulations and commerce laws overnight, it is the outcome of over 100 years struggle over cheating, fraut, law suits etc. in China, these 100 years evolution is being playing in fast forward in 20 years.

      Chinese culture is a hight trust culture. large sum of business transaction can get done without much legal and financial intermidiate institutions. that is why business can flourish in China even China have very premitive legal/financial system, that is the reason why oversea Chinese business network dominate local economy in some of the country that have no effective legal/financial system. most deals were done on sheer personal trust, while in the west, a large can involve hundreds of pages legal/financial documents.

      as for quality, BYD and Sony are both in li-ion battery business, supply to similar set of customers(Nokia, motorola etc), Sony's batteries suffer large scale quality problem, buring, exploding all over the world. BYD's batteries are doing fine. there should be a news "Chinese BYD beat Japanese Sony in bettery quality", but no western media is going to report it, and we all know why.

      China supply 1.5 trillion worth of goods to the world a year. 20 years ago, it was near zero. most of these supply relationships are long term build over the last 20 years. you can not build a long term supply relationship on cheating. period.

      there is intrisic difficulty in transition from one system to another. in Russia, at one time, rich business people hire body guards because business disputes are often settled by machine guns. it is getting better now. just dont rush into judgement before think things over.
        • 6 Years Ago
        "there is no "Endemic cheating" in China now or in Chinese culture in general."

        Tell that to Microsoft. When the sent out an "update" that blackened screens for a few minutes on stolen software the whole country almost blacked out including Govt. offices! The Government raised such an uproar and threats Microsoft backed down!
        We will never be able to compete as long as the field is grossly tilted in their favor.
        Everyone SAW what China's environmental rules look like in Bejing.
        Everyone KNOWS what happens to people who try to improve working conditions.

        Free trade with lowest price as the only consideration is a race to the bottom.
        SLAVE LABOR is not efficiency.
        RAMPANT ENVIRONMENTAL corruption affects the whole world.

        As long as our corporate chiefs are willing to give away trade secrets and offshore manufacturing to save their jobs and get short term bonuses we are doomed.

        Our only hope is to start imposing the cost of regulation and inspection on imported goods that are using those costs on domestic manufacturers to dominate.
        A country without manufacturing will never be a power.
        • 6 Years Ago

        there is wide spread software piracy in China. partly because Chinese consumer are much poor and partly because Chinese culture.

        Chinese culture regard IP by fame, great works widely copies for free, as long as the author is properly acknowledged, a bit like GPL license agreement for Linux. western culture reward IP by money.

        i don't want to argue which one is morally superior, you be the judge. but China is in the transition into current western system and it takes time.

        don't use sensational words "stealing, slave labor", the wall street lost trillions of dollar for investors here and all over the world, is this not "stealing"?

        software piracy is wrong and should be corrected, i do not disagree with you. that dose not defeat my argument that Chinese culture is a hight trust culture. people value trust b/w each other highly.
        • 6 Years Ago
        What's this BYD co. thinking? Gs prices are really low now. There's no need for EVs anymore.
        • 6 Years Ago
        Yes there is. My company works with Chinese manufacturers. We know they are cheating, and expect they are cheating.

        For example, our company has to pay for the test equipment used at the end of the line to test the electronic devices before they are shipped. Every unit must be tested before it is shipped. By the calculated cycle time, the most units that could be tested in an hour is 1,000 (for example). But our manufacturer has managed to build over 9,000 units (for example) in an 8 hour period and claim them as tested and thus ship them.

        You do the math.

        They're cheating. And as Mike says, it leads to quality problems.
      • 6 Years Ago
      by the way, BYD had never said to launch in US in 2010, where comes 1 year delay?
      • 6 Years Ago
      The delay is a shame. The high cost of gas this past year put a hurting on all of us, our economy and our society. We need to move forward as a society and utilize every available source of energy to lessen our use of foreign oil.It would cost the equivalent of 60 cents a gallon to charge and drive an electric car. The electricity to charge the car could come from solar or wind generated electricity. If all gasoline cars, trucks, and suv’s instead had plug-in electric drive trains, the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of North Dakota. Why don't we use some of the billions in bail out money to bail us out of our dependence on foreign oil? This past year the high cost of fuel so seriously damaged our economy and society that the ripple effects will be felt for years to come. Why not invest in setting up some alternative energy projects on a national basis, create clean cheap electricity, create millions of badly needed new green collar jobs, and get out from under our dependence on foreign oil. What a win -win situation that would be. There is a great new book out called The Manhattan Project of 2009 Energy Independence NOW by Jeff Wilson. I highly recommend this book for anyone interested in alternative energy. www.themanhattanprojectof2009.com

      • 6 Years Ago
      Large-format lithium vehicle batteries are still over $1,000/kWh.

      No indication BYD has had any price breakthrough.

      Not to mention Chinese cars still can't pass any developed nation's crash tests.
        • 6 Years Ago
        Here's the price breakthrough: BYD and other Chinese battery makers in the LiFePo4 business are actually years ahead of the rest of the world. This includes the Japanese and the Koreans. Even if the rest of the world catches up with the Chinese in the LiFePo4 technology space, the Chinese still has a natural advantage. This natural advantage is the fact that China has the world's largest lithium deposit. The Japanese and the Koreans have none. This is why BYD can charge only $6000 more per car for the DM power pack.
      • 6 Years Ago
      It's great, mother earth is happier now, i can't wait to see this BYD car and possibly will buy one since my Honda is about to give up. Just be happy guys, can't we all just get along!! Embrace this new thing it does not matter who makes it as long as it works. BYD makes batteries Nokia that says something about this company.
      • 6 Years Ago
      Two problems with Chinese production: Quality and Endemic cheating on contracts, leading to Quality problems. I've yet to hear if this is endemic in the Chinese culture.

      I applaud the Chinese long-sighted development of Electric cars. And I regret that the US CEO's have given away our competitive advantage to the Chinese essentially for free.
      • 6 Years Ago
      to LS2LS7

      if your partner is cheating, you should dump them/hold payment/suit them. at the end of day, only honest business people stay in business, this is the ultimate fair system, it has being working for 20 years in China. if an entire population is dishonest, they don't deserve to have any business at all. at the end of day, who is getting business who is not, who is honest who is not, it is clear.

      if you know your partner is dishonest and still chose to do business then you have no right to complain, you are rewarding cheating and should suffer the consequence. fair.
        • 6 Years Ago
        for one time deal, yes i can understand, because the over head. ask people who worked with a contractor to build a home in here in the US, how many people will not complain their contractors are cheating!! should we generalize this about American people and American culture!! but for long term supplier relationship, people generally appreciate each other's business, domestically or internationally.

        "you can't dump a contractor" for a long term supply relationship is flat false. most Chinese companies are in very competitive business, none hold any monopoly position at all, and a foreign company usual hold a dominant position relative to the Chinese suppliers, you have a lot more options and leverage then your Chinese counter party. if you are unhappy with all Chinese suppliers you can switch to other countries. India, Philippine, Vietnam and many other countries now have much cheaper labor than China, and many these countries have large English speaking population and very westernized legal/financial system. in one word, you have options and you(foreign buyers) are at a dominant position, if you chose to work with a cheater for not a single deal, but a long term business relation can claim no high moral ground.

        i am not here to defend your Chinese contractors or Chinese business in general, I am sick of generalize every bad news to Chinese people or Chinese culture.

        Chinese product safety regulation is still lagging behind that of western countries and business deals are perhaps not up to western standards, but China is a much poor country and just begin to build a commerce driven society in as short as 20 years. these two facts are more than enough to explain all the gap. and most people chose to do business with Chinese companies indicate, In similar economic situation, Chinese companies are better to deal with.

        now we are arguably in the mist of the largest financial fraud that drag the world into deep recession. should we generalize it to indicate the current moral stands of the western world? why we feel like to generalize anything Chinese?

        I am Chinese American, as a group we have some of the lowest crime rate, highest credit score, very low default rate. does this tell somthing of the "moral stand" of Chinese people or culture?

        for WhyNot, i challenge you to exposure your cheating suppliers(with evidence) and cut the tie. show some courage and backbone. there is a website alibaba.com you can rate your Chinese suppliers just like ebay.

        • 6 Years Ago
        I guess you've never worked with a contract manufacturer. You can't dump them. We already work with 4 companies, and the problems I described were with one of the better ones. One of them just flat out cooked the books and ripped us off. And we still work with THEM too!

        If you dump a contract manufacturer, you just end up with no product to sell. Which is a problem. You can try to switch to another supplier the next year with your new product if you want. Sometimes that succeeds.

        My company still works with Chinese manufacturers, because even with the cheating, it's the best deal going. But that DOESN'T mean the aren't cheating. Cause they are.
        • 6 Years Ago
        cover, you hit on a bit of a problem.

        Knowingly working with a company that cheats, makes WhyNot's company cheaters too.

        The catch is that if they dump them, they're not competitive. Their competition likely works with (cheating) Chinese companies. WhyNot's company would then go out of business.

        The culture of accepting these practices has been injected into the US, as the consumer puts price above everything else (and investors put profits above everything else). To resolve these issues, we need to force the consumer to stop accepting sub-par practices, at the expense of price. The only way to do that is through regulation.
      • 6 Years Ago
      I applaud BYD and will seriously consider their product the minute it becomes available in the USA!

      Detroit needs to re-think and re-tool every aspect of their business model or be left to die on the vine.
      • 6 Years Ago
      if the chinese spend the year of delay on their hybrid improving quality, look out prius.........
      • 6 Years Ago
      Quality: I believe you guys never hear BYD before, it is Nokia supplier and i dont it has lot of Quality problems....i had never heard someone complain about Nokia's batteries.

      Tech: if you claimed BYD is stealing, please at least tell us who in US had made this car/battery...

      Price: no argument, unless RMB appreciates, it will sell at below 22000....22000 is current price, and this car maker is selling $4500 car in china, if 22000 shocked you, please wait and be shocked again and again...

      Outlook design: it is copycat, no doubt, it will lauches 2 more hybrids and 1 full-electric verson in 2009, all are copys...

      Safety Test: Lets see, according to chinese newspaper, the car had passed "EU standards" crash test

      Futures: Even you dont buy BYD hybrid car because chinese is dishonest, car makers will buy their tech, car design, batteries, they would do ODM and you still cant escape from using Chinese cars.....until those poor chinese' wage rises.

      Cheating: the biggest cheater in the world is US gov, not poor chinese, if someday chinese are big enough to cheat, i would be worry.

        • 6 Years Ago
        Just started working with 2 Chinese manufactories. One asked for 50% deposit and second did samples without deposit. Second already sent to me good samples and I paid after receiving.
        Manufactory who I paid deposit stop to be nice after get my money. Few samples they did after 3 month are terrible (they sent e-mails finaly) not even close to drawing and description, workers not cooperative, very rude and do not want to make changes. Even person in international department e-mailed me that she could not read description because the problem is her English and this is not true. So, now they forcing me to pay more and more money to fix their mistakes. What to do?Can I report them to Chinese government for fraud and extortion money?
      • 6 Years Ago
      They delayed it because it's a lie. I know everyone would like to believe it is possible to make this vehicle and just GM (or whomever) can't figure out how to do it. But it's not true. This vehicle would have to contain $20K to $30K of batteries. It simply cannot be made and sold at that price by anyone who wants to stay in business.

      So they'll make 5 at most and sell them at an enormous loss. No 3rd party will ever get to test it.

      It's just a PR stunt.
        • 6 Years Ago
        No, the price I gave was if you bought directly from the supplier, with decently negotiated prices (but not the best possible). If bought small volume or through a middleman you'd pay 2X or more, depending.

        You can say the price isn't set it stone, but companies don't stay in business and make money by giving away things for less than it costs them to make them. So like I said, they can make some by setting an unrealistic internal chargeback price if they want. But no matter what they set it at, if they make a bunch of these cars and sell them at $30K with $45K worth of materials in them, they'll lose their shirts at a rapid pace.

        So they just won't make any. And the ones sold will probably never be tested by independent sources and thus if they want, they can make them have reduced range and save money on them.

        It's still just a big lie. You might as well place your faith in the Mini-E, which is also BS, they would cost a fortune if they sold them even at break even, so they simply don't sell them.
        • 6 Years Ago
        Well, retard, they went up for sale THIS MONTH in China so there goes your ignorant claim.

        And guess why they are able to provide batteries so cheaply...BECAUSE THEY CAN HUGE LITHIUM RESERVES IN THEIR HOME COUNTRY. The Chinese are also more advanced in battery tech than the Japanese or Koreans. Hence the packs increase the price by only $6,000.

        Your comments incredibly racist and would merit you being fired for making such comments about your company's business partners. I hope you were saying this on a company computer.
        • 6 Years Ago
        20k-30k battery is the current price if you have to buy it from a third party supplier. it is not set in stone, certainly not for a battery maker himself.
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