- Mar 10, 2011
WikiLeaks reveals disturbing business practices of Buffett's BYD
2009 BYD F3DM – Click above for high-res image gallery
Are Chinese cars nothing more than cheap copies of other automaker's products in other parts of the world? That's a question that's been asked rather widely for the last several years as the numbers of large Chinese automakers has risen dramatically, and even more so as they have shown their wares at major auto shows outside their home country.
There is certainly no doubt that many, if not most, cars rolling out of factories in China bear a striking exterior resemblance to popular models from Japan, Europe and the United States. But do those exterior facsimiles go more than skin deep, and if so, does it matter? What about the actual guts of the vehicles – are Chinese automakers creating their own important new technologies, especially in the burgeoning eco-friendly segment?
These are the questions bandied about in a special report from Reuters, targeted specifically in the direction of BYD, the Chinese automaker that has been buoyed by major investments and backed by Warren Buffett. The big draw for Buffett and his money was BYD's proprietary battery technology, which it uses on its own branded electric cars, some of which are supposedly coming to America.
Reuters, though, citing documents it received by a third party from WikiLeaks, charges that BYD's battery tech may not be all its cracked up to be, and that sales of its EVs are painfully slow. Further, officials such as Guanzhou Consul-General Brian Goldbeck reportedly said two years ago that BYD's vehicles may pass China's lax copyright laws, but aren't likely to in other countries.
Just as damningly, unnamed consultants claim BYD's vehicles are very unlikely to pass U.S. safety standards, saying of one of BYD's models, "If you shut the doors too hard, they fall off." Removable doors... not good. Some automakers polled by Reuters claim that BYD requests just enough parts from reputable suppliers to reverse engineer the designs and then assemble them itself using inferior materials.
What all of this means for BYD and for Warren Buffett's billion-dollar investment into the company remains to be seen, but it can hardly bode well for the brand's chances in such competitive markets as the United States.