ITA-1 International marketing

INTERNATIONAL MARKETING
ISA – 2
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About BYD

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BYD (Build your dreams) is a Chinese multinational technology company manufacturing electric
passenger cars, buses, trucks, forklifts, and rechargeable batteries. Its current passenger auto segment
includes battery electric vehicles (BEVs) and plug in hybrid electric vehicles (PHEVs).

Founded in February 1995, BYD has since leveraged technological innovations for a better life. After
more than 20 years of high-speed growth, BYD has established over 30 industrial parks across 6
continents and played a significant role in industries related to electronics, auto, new energy, and rail
transit.

With a focus on energy acquisition, storage, and application, BYD offers comprehensive new energy
solutions with zero-emission. As a company listed on both the Hong Kong and Shenzhen Stock
Exchanges. From Jan to Sept 2022, its turnover and total market value both exceed 38.4 billion USD.

BYD Bavaria

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BYD Bavaria is an authorised BYD dealership located in Talegaon, Panji, Goa. It currently provides 2
car models for sale which are the BYD Atto 3® and the BYD e6®. Both these models are imported
from China, manufactured at their facility in Shenzhen.

BYD Atto 3
___

BYD e6
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Going International

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BYD’s entry into global markets is characterized by rapid expansion philosophy with the goal of
tapping into the growing global demand for EVs and renewable energy solutions, recognising an
increasing shift towards sustainable transportation solutions.

Based off in mainland China, BYD quickly became the bestselling sedan in China by 2009. Backed
heavily by Warren Buffet’s Berkshire Hathaway, BYD has since expanded rapidly worldwide. Here is
a quick glance:

 Started exports to Africa, South  Australia procures over 2000 BYD

America, and the middle east in 2009
competing on price rather than quality.
 BYD Qin dynasty series plug in
hybrid launched in Latin America in
2014.
 Announced plans to set up facilities in
Brazil to produce EVs and buses in
2015.
 Announced expansion plans into
European markets starting with
Norway, with the BYD Tang series in
May 2020.
vehicles for its taxi fleet in 2021.
 Colombian markets show interest as
Bogota places order for 1000+ EVs to
be delivered by end of 2022.
 BYD overtakes Tesla as the world’s
largest EV maker on June 2022.
 In talks to sell BYD Atto 3 in Japan
from 2023.
 Launched Global design centre
consisting of industry veterans from
top car brands including Audi, Ferrari,
and Mercedes – Benz.

Challenges
BYD being an international player faces challenges when dealing with business in foreign countries.
Some of them are listed below:

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Regulatory and Policy Differences:

Each country has its own regulations, policies, and incentives related to electric vehicles and
renewable energy. Navigating and complying with these varying regulations is complex and time-
consuming especially for international companies like BYD.

Infrastructure Development:
The success of electric vehicles depends on the availability of charging infrastructure. BYD faces the
challenge of advocating for and sometimes investing in charging networks in different countries
especially India, to support the adoption of their EVs.

Supply Chain Management:

Electric vehicle manufacturing requires a complex supply chain involving various components,
including batteries and electric drivetrains. Managing a global supply chain while ensuring timely and
cost-effective deliveries is challenging.

Cultural and Market Differences:

Understanding local market preferences, consumer behaviours, and cultural nuances is essential for
success. BYD needs to adapt its products and marketing strategies to meet the specific needs of
diverse markets.

Competition:
The electric vehicle and renewable energy industries have seen rapid growth, leading to increased
competition. BYD faces competition not only from other international players but also from local
companies that might have advantages in terms of market familiarity and cost structure.

Brand Recognition:
Building and maintaining brand recognition in new markets can be challenging. BYD being an
emerging and expanding company might need to invest in marketing and branding efforts to establish
themselves as trustworthy and reliable choices.

Economic Factors:
Economic fluctuations and currency exchange rates can impact the affordability and demand for
electric vehicles. BYD needs to consider economic factors that affect consumer purchasing power.

Overcoming challenges
Regulatory and Policy Differences:
BYD has adapts its products and services to adhere with local regulations. They engage with
governments to advocate for supportive policies and incentives.

Infrastructure Development:

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BYD collaborates with host country partners to invest in charging networks, often working with local
governments to establish necessary EV infrastructure. It takes advantage of the incentives provided by
governments.

Supply Chain Management:

BYD recognizes supply chain disruptions and their effects on production. It has diversified its
supplier/vendor base and continually looks for expanding their network in foreign countries. It has
even set up manufacturing units in foreign countries to reduce dependence.

Cultural and Market Differences:

BYD is all about customization and adaptation. BYD does extensive research on the host country’s
demographics and cultural dimensions and employs relevant marketing and promotional techniques to
capture a wider audience.

Competition:
Holding numerous battery technology patents including the legendary blade battery technology, BYD
leads the competition in terms of technological and innovative prowess. Their products are
differentiated and reflect their emphasize on their early entry and expertise in the EV segment.

Brand Recognition:
BYD has built a strong brand with presence across consumer applications. It aims to maintain and
improve its brand image by focusing on sustainability and environmental conservation efforts.

Economic Factors:
BYD has a considerably large presence in almost all the continents of the world. this allows them to
maintain a wide portfolio of products in multiple markets therefore spreading their overall market risk
and offsetting profits against losses. Additionally, the company is well funded and backed by
renowned entities such as Berkshire Hathaway.

Tariff and Non-tariff barriers

BYD faces tariff as well as non-tariff barriers when they export their products. Tariffs are taxes
imposed on imported goods and services, making them more expensive and less competitive in the
importing country's market.

 Import Duties:
These are taxes imposed on the value of imported goods. Electric vehicles, components, and
batteries are subject to import duties in various countries. For India, there is a
subsidized/concessional rate offered for EVs.

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 Specific Tariffs:
These are fixed charges based on the quantity or weight of imported goods. They can affect
the cost of transportation and logistics for products like vehicles.

 Ad Valorem Tariffs:
These tariffs are based on a percentage of the value of the imported goods. Higher-value
electric vehicles could face higher ad valorem tariffs.

Non-tariff barriers are regulatory or administrative measures that can hinder trade. They are not direct
taxes but can impact the ease of doing business in foreign markets.

 Technical Standards and Regulations:

Different countries have varying safety, emissions, and technical standards for vehicles.
Complying with these regulations might require modifications to BYD's products. Especially
after many allegations of Chinese consumer products being fitted with spying malware,
technical standards and security concerns have been extensively scrutinized especially when
exporting to India.

 Certification and Testing Requirements:

EVs often need certification to prove their compliance with safety and environmental
standards. These certifications are time-consuming and expensive.

 Import Licensing:
countries such as India require import licenses for certain products, including vehicles. These
licenses can be difficult to obtain and create administrative hurdles.

 Local Content Requirements:

Some countries might require a certain percentage of a product's components to be sourced
locally. This can affect supply chains and production processes.

 Customs Procedures:
Complex customs procedures and paperwork can lead to delays and additional costs at
borders.

Segmentation and targeting

BYD employs various segmentation and targeting strategies when entering foreign markets for their
electric vehicle and renewable energy products.
These strategies help them effectively tailor their offerings to specific customer segments and
maximize their market penetration. Here is how they approach segmentation and targeting:

DEMOGRAPHIC SEGMENTATION

 BYD looks for people who are ideally between the age group of 20 – 40.

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 Their products being EV vehicles are a little on the expensive end hence they target upper
middle class.

 Mostly environmental enthusiasts, and frequent travellers are their target people for which
they emphasize on the brand’s commitment to environmental sustainability (such as
contribution to the global efforts to reduce temperature by 1 degree Celsius every few years)
and the car’s impressive range and convenience with their best models going over 700 km per
full charge.

PSYCHOGRAPHIC SEGMENTATION

 BYD seeks to create and deliver messages that resonate with their audience' beliefs and
aspirations.

 They target bold people who do not care about limitations and expectations.

 Their wide portfolio of products caters to almost every personality type ranging from those
who prioritize comfort and affordability to speed and adventure.

 BYD focuses strongly on the new generation of youth especially the early adopters who are
eager to try out new products and services and those who are more eco-conscious and are
willing to pay for sustainable products and services.

CONSUMER, COMMERCIAL AND GOVERNMENTAL TARGETING

 BYD tailors their offerings to both commercial and individual customers.

 They offer electric buses to municipalities and governments and cars to individuals and
transport and related vehicles for businesses.

INFRASTRUCTURAL AVAILABILITY AND ENVIRONMENTAL AWARENESS

 Being predominantly an EV brand, BYD prioritizes entering those markets which have
sufficient or developing charging infrastructure which is crucial for any EV application.

 BYD’s presence in the European and the Indian markets is evident of this.

 BYD also focuses on markets where there is a high level of environmental consciousness and
a willingness to adopt cleaner transportation options.

URBAN POPULATION
 BYD seeks markets which are denser and well populated.

 These markets display strong demand for electric mobility solutions amidst rising fuel prices,
cost of transit, pollution, and eco-awareness as the main drivers.

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International entry modes

EXPORTING

BYD has manufacturing facilities most of which are in mainland China and select countries from
where it manufactures and ships the products to various markets worldwide. Exporting is the main
source of entry into foreign markets for BYD.

JOINT VENTURES

Through Joint-ventures, BYD has not only entered new markets but also worked on collaborative
projects. One significant JV was signed between BYD and the Japanese auto giant Toyota to jointly
develop BEVs in 2019, interestingly the JV was instigated by Toyota when they saw and were
impressed by the value, design, and quality of the BYD Tang hybrid.

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STRATEGIC ALLIANCES AND PARTNERSHIPS

BYD partnered with British coach manufacturer Alexander Dennis to supply electric bus chassis. The
Enviro200ev single deck and the Enviro400ev double deck are built using their chassis.

DIRECT INVESTMENT

BYD has invested a large sum into setting up various manufacturing facilities across China as well as
markets such Brazil. They have set up bus and rail manufacturing facilities in California, Ontario, and
Hungary as well. The new BYD design centre is a state-of-the-art research and development plant set
up by BYD.

ACQUISITIONS

The most popular way of rapid expansion is aggressive acquisition. Although BYD major acquisitions
have been in mainland China, it is in talks and plans to acquire foreign companies.

LICENSING AND FRANCHISING

BYD’s has proprietary patented technology on blade battery systems. In order to increase its global
presence, it has set up multiple franchisees/dealerships in 5 of the 7 continents.

Branding and Positioning strategies

Green and Sustainable Image:
BYD positions itself as a leader in sustainable transportation and renewable energy solutions. Their
brand message emphasizes their commitment to reducing carbon emissions and promoting
environmental responsibility.

Innovation and Technology:

highlights its innovative technology in electric vehicles and battery solutions. They showcase their
advancements in battery chemistry, energy storage, and electric drivetrains to position themselves as
pioneers in the industry.

Quality and Reliability:

BYD focuses on producing high-quality products that are reliable and durable. They emphasize the
safety and performance of their electric vehicles and batteries to build trust with consumers.

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Affordability and Accessibility:

BYD aims to make electric vehicles accessible to a broader range of consumers. They position their
products as cost-effective alternatives to traditional vehicles, appealing to budget-conscious
customers.

Customization and Versatility:

BYD showcases the versatility of their product lineup, offering electric solutions for various
applications such as buses, cars, trucks, and monorails. This demonstrates their ability to cater to
different market segments.

Safety and Compliance:

Given the unique safety considerations of electric vehicles, BYD positions their products as meeting
stringent safety standards and regulations, reassuring consumers about their safety. They have
received a very favourable NADCAP rating.

Consumer Education:
BYD invests in educating consumers about the benefits of electric vehicles and the technology behind
them. This helps position them as thought leaders in the field and builds consumer confidence.

Social Responsibility:
BYD emphasizes their corporate social responsibility efforts, such as green initiatives, community
engagement, and ethical business practices, to foster a positive brand image.

Export
Direct exporting refers to the process of selling directly to consumers in a foreign market without the
help of any independent third-party intermediary or agent.

BYD directly exports its products from China to countries such as India, Brazil, Australia, Europe,
Singapore etc. BYD has established multiple subsidiaries in host countries to facilitate distribution.

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Standardization and Adaptation

Standardized products are relatively uniform across markets and segments whereas adapted products
are modified to fit the needs, wants and specifications of a particular market/segment.

BYD ensures standardization across all their products in terms of vehicle safety and security features.
The patented blade battery technology is also used in almost all their EV products.

In terms of adaptation, BYD provides Atto3® model for sale in the Indian and Japanese markets since
these models are designed to provide comfort, convenience and affordability which are important
factors for consumers of these nations, whereas high performance luxury sport models are sold in
western and European markets. The Atto3® is also designed with a body and framework size that is
kept small to fit under a favourable tax slab as an SUV.

Promotional campaigns worldwide emphasize on the overall reliability and eco-friendly nature of
EVs.

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Export price quotations and Incoterms

Free On Board (FOB)
BYD uses Free on Board it generally means that the seller (BYD) is responsible for the goods until
they are loaded onto the ship at the port of departure. Once the goods are loaded on the ship, the
responsibility, risk, and ownership of the goods shift from the seller to the buyer. The buyer then
becomes responsible for transportation costs, insurance, and any risks associated with the shipment
from that point onward.
the documentation required for a Free on Board (FOB) shipment -
Commercial Invoice:
This document provides a detailed breakdown of the goods being shipped, including their description,
quantity, price, and any applicable taxes or duties. It's used for customs clearance and payment
purposes.
Certificate of Origin:
Depending on trade agreements and customs requirements, a certificate of origin may be needed to
verify where the goods were produced. It can affect the determination of import duties.

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Insurance Certificate:
If the importer is responsible for insuring the goods during transit, they may require an insurance
certificate to prove that the shipment is adequately insured.
Import /Export license or Permit:
When it comes to import and export permits for BYD, they need appropriate permits to import
components, materials, and technology required for their manufacturing processes. Additionally, they
require export permits to ship their products to various international markets. These permits ensure
compliance with trade regulations, customs procedures, and any international agreements related to
electric vehicles and related technologies.

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