Locked out of USA, BYD looks to Toyota's homeland to prove its worth
Shaun · Dec 20, 2023 11:04 AM
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BYD sees Japan as a crucial test for its global market expansion, reports Nikkei Asia. Overcoming the challenges of a market known for being tough on imported cars will be a significant milestone for the company.
Globally, BYD has experienced success with sales volume increasing by 75 percent in the first three quarters of the year, reaching 2.08 million vehicles. In the third quarter, the company was close to surpassing Tesla in global electric vehicle (EV) sales.
This is despite BYD cars not being available in the US market, citing concerns that the Inflation Reduction Act (IRA) might hinder EV adoption in the US by making affordable electric vehicles less accessible to American consumers. Though the company does supply electric buses in the US.
With a focus on passenger vehicles in Japan, BYD entered the market in January and aims to sell 30,000 EVs annually by 2025, according to dealers. This puts it right in contention with the established German brands such as BMW, Volkswagen, and Audi, trailing only Mercedes-Benz based on cumulative sales for 2023 (until November).
The company plans to establish a network of 100 dealerships in Japan by that time, each expected to sell 300 units. This ambitious goal surpasses the average sales target of 200 vehicles per year for Japanese auto industry dealerships.
Japan, being the world's fourth-largest automotive market, poses challenges as Japanese carmakers dominate with a market share exceeding 90 percent.
Despite low brand recognition for Chinese companies in Japan, BYD has revised its sales strategy, shifting from online sales to establishing physical dealerships.
Liu Xueliang, BYD's general manager for the Asia-Pacific region and president of BYD Japan, stated, "It is precisely because we're in Japan, where nobody knows our brand, that we should bring people in contact with vehicles and dealers. Japanese consumers are abundantly sensitive toward autos, and they would be difficult to capture through online channels."
BYD plans to build its dealership network independently, a departure from its usual approach of working with local distributors.
Currently, BYD's lineup in Japan includes the BYD Dolphin and BYD Atto 3, with the BYD Seal scheduled to be launched in Q2 2024.
BYD booth at the Japan Mobility Show earlier this year.
To address the shortage of EV mechanics in Japan, BYD has partnered with Meiji Sangyo, a Tokyo-based auto parts company, to train technicians. The company believes that success in Japan will serve as a model for expanding its presence across Asia and the rest of the world.
Despite Japan's shrinking population, BYD sees it as a gateway for success, and industry experts suggest that if the company can thrive in Japan, it will gain widespread support globally.
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