The past couple of years have seen a massive influx of Chinese carmakers into Malaysia. Some came in to challenge the established brands while others tried to carve a foothold in the small but growing battery electric vehicle (BEV) market.

Shenzhen-based BYD succeeded in the latter as it introduced a slew of affordably priced BEVs that made the brand a household name among consumers. Though Tesla might still be the BEV that most Malaysians aspire to own, it is BYD that has won the popularity poll with over 10,000 units sold since its local launch in late 2022.

Having created a more mainstream pathway to BEVs, BYD’s next step in Malaysia isn’t going to be just introducing additional new models to the lineup but a whole new brand. Just like many Chinese carmakers, BYD also has a few sub-brands under it and one of them was a joint venture with one of the most premiere names in the automotive industry.

But before we dive into Denza, we should reacquaint ourselves a little bit on how a battery manufacturer decided to expand to automobiles.

Acquisition and a nest of investments

In January 2003, BYD Auto was founded following the purchase of a struggling carmaker, Qinchuan Automobile, from Chinese state-owned weapons manufacturer, Norinco. BYD’s first car was called the Flyer which was carried over from Qinchuan and used old Suzuki mechanicals.

At the time, China’s BEV sales were mostly non-existent with traditional internal combustion engine (ICE) vehicles choking the country’s major cities. BYD sensed an opportunity in the nascent BEV segment and a year after entering the car market, it debuted the BYD ET pure electric concept car at the 2004 Beijing Auto Show.

Being a small carmaker with no backing from the wealthier state-owned companies, BYD’s first electric car concept was met with little fanfare. Though the overall design is rather typical of any concept car of the mid-2000s, the ET’s front end resembles a first-gen Mercedes-Benz A-Class.

Fearing the backlash and any copyright infringement letters from the mighty Stuttgart luxury brand, BYD did a complete redesign of the ET concept car and presented it at the 2004 Guangzhou Auto Show in November.

The infant carmaker released some claimed figures for the concept which included a maximum range of 400 km and was juiced up by a “high-performance” 200 Ah lithium-ion battery. None of these were revealed in the concept showcase but aside from the ET, BYD also unveiled a prototype of an electric version of the Flyer in a strange-looking sedan taxi form.

Neither the ET nor the electric Flyer went into production and BYD would eventually launch its first self-developed car, the F3 which resembled a Toyota Corolla Altis in front, sported Honda City taillights, and was powered by a Mitsubishi-sourced engine. BYD would launch other models that resembled existing Toyotas, Hondas, or in the case of the BYD F8, a Mercedes-Benz.

From a design perspective, BYD Auto seemed more like any other smaller, independent Chinese carmakers at the time – lame, shoddy copycats.

Unlike those smaller, independent Chinese carmakers though, BYD had a strong vision for the industry and that is through cleaner electrified vehicles. It launched the F3 DM in 2008 which was the world’s first mass-produced plug-in hybrid vehicle (PHEV) and continued developing battery-powered vehicles.

The company’s potential in battery technology caught the eye of international venture capitalists and international firms. When Warren Buffett announced acquiring a 10% stake in BYD in 2008, it shook the business world as he mainly invested in American companies. In a way, that boosted the credibility of BYD in international eyes.

Mercedes enters

In 2009, BYD launched its first production electric car, the BYD e6. The minivan is largely used for fleet services like taxis and some of its shape was carried over from the ET concept 5 years earlier.

The e6 began BYD’s crusade for mass adoption of BEVs and in March 2010, the company would join forces with one of the most storied names in the automotive world. The establishment of Shenzhen BYD Daimler New Technology was a 50-50 partnership between BYD and Mercedes-Benz.

In 2012, the Denza name was unveiled and this seemed like a merger between David and Goliath. One was a rising carmaker that foreshadowed a future where mobility is going electric while the other was a legacy brand that is looking certain to continue to ride the wave of this new generation.

By this time, China’s middle class was growing at a massive rate not seen by any other nation since the end of World War II. Foreign brands began to start noticing the ample opportunities opening up behind the Bamboo Curtain and Mercedes-Benz was not going to be left out completely by its competitors.

Aside from penetrating the Chinese market, the German giant was also trying to understand how to market electrified vehicles in the country which was slowly growing thanks to generous subsidies and incentives.

Meanwhile, the Denza name is phonetically similar to Mercedes-Benz in Chinese and hence, the resemblance to the German carmaker. In Chinese, Denza is roughly translated to “rising power and momentum”.

Mercedes exits

In theory, partnering with a well-known giant that literally invented the automobile could have been fruitful for both companies but that has not always been the case. Just like Ssangyong’s collaboration in the 1990s, BYD’s and Mercedes’ partnership did not produce the intended success both had hoped for.

The first Denza model launched was the Denza EV which was based on the Mercedes-Benz B-Class and utilized powertrains from the BYD e6. Designed by Olivier Boulay who was largely known for overseeing most of Mitsubishi’s designs in the early- to mid-2000s, the electric car looked bizarre.

With a strange rear design that incorporated a sedan-like boot with the B-Class’ mini-MPV proportions, the first Denza was too weird to suit Chinese tastes. It received a few updates throughout the 5 years in production, mostly with changes in range to a maximum of 500 km.

Following its discontinuation in 2019, Denza launched its second model, the Denza X which was offered as both electric and PHEV guises. Compared to the weird-looking first Denza, the Denza SUV lasted for only 2 years with a mere 9,133 units which is 1.5 times fewer than the Denza EV.

Mercedes-Benz saw little returns from this joint venture and announced that it was reducing its stake to 10% in 2021. The alliance dropped Daimler’s name and was changed to Shenzhen Denza New Energy Vehicle Co Ltd.

BYD could have just closed the brand and called it a day but for these dreamers, giving up has never been part of their agenda.

Denza restructured

In an interview with China’s Auto Sohu following the launch of the BYD F3 in 2005, Xia Zhibing, the general manager of BYD Auto at the time recalled the company’s founder's reaction to an initial prototype that failed to meet expectations.

“The first model we were going to launch, codenamed 316, was scrapped and never made it to the market. The company spent a lot of money and after a year of development, we received plenty of criticisms when 316 was first revealed to dealers,” Xia told the Chinese website.

He continued, “Our Chairman Wang Chuanfu finally decided not to launch this product and smashed the prototype car with his own hands. I still remember the weather clearly. It was cold and rainy, about 2 or 3 degrees, and we were all in a bad mood.”

Despite looking very much like a photostated Corolla Altis, the F3 became a huge success and cemented BYD among Chinese consumers. In the case of Denza, BYD sensed potential with the brand as not merely an electrified collaboration with Mercedes-Benz but a whole new luxury brand.

The timing was right for BYD as it would soon see a remarkable trajectory in sales domestically and overseas. In China, the brand has already established itself as the go-to brand for the country’s new energy vehicle (NEV) segment which pools together both BEVs and PHEVs.

With the BYD brand becoming mainstream, the company turned Denza into a luxury-oriented brand and introduced its first all-new model after a year of restructuring in 2022. The Denza D9 might be clearly inspired by the Toyota Alphard to some but even among China’s popular boxy MPV market, it became a hit among consumers.

Denza further expanded its dealer network and began to launch new models and updates every year. Following the Denza D9 were the Denza N7 in 2023 and the Denza Z9 in 2024. Last year also saw the brand expanding overseas with Hong Kong becoming its first global and right-hand drive (RHD) market.

In September, Mercedes-Benz announced it relinquished its remaining 10% stake in Denza as the reborn brand becomes a fully owned subsidiary of BYD.

Denza will be making its way to new markets in 2025 including Malaysia. As reported in November, the Denza D9 will be the first model to be launched around the first quarter of the year (Q1 2025).

What do we think about the D9? Well, you will have to stay tuned for the next part of this series of articles. This is only the beginning for Denza.

Also read: Confirmed for Malaysia: Denza D9 to launch in Q1 2025, first of many more upscale BYD models