01

Operations Strategy at BYD of China,

Electrifying the World’s Automotive Market

General Management 12 - Syndicate Group 1

Aditya Indrasaputra - Ahsan Ismail Anwar - Aisyah Fanya Setiana
Andrea Devina - Anisa Ananta Citra - Annisa Fitri Febrianti
02 Fact Finding (EV vs. Gasoline) :
EV has no tailpipe emissions (eco-friendly), and more cheaper than fuel (per mile basis). (+)

But shorter range driving, and uncomfortable for long distance drive.
Safety concerns due to prone of explosion.
More complex for the operation.
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Fact Finding (Battery Dev.) :

Exhibit 2. Key Players in the electric auto battery Industry, 2009.

M.I.T. spin-off with $250M in venture

A123 (USA)
capital.
◦Still have bottleneck in Battery research & development,
AESC (Japan) Joint venture between Nissan and NEC. Lithium-Ion have its up-sides compared to Conventional.
BYD (China) Largest battery producer in China.
◦Battery is still large and expensive. (USD $10,000-20,000 each)
Once part of Delphi. Invested $200M in
ENERDEL (USA) Indiana plant. ◦BYD has their Ferrous Li-Ion, safer and cheaper than Li-Ion.
Johnson Controls / SAFT (USA / France) Joint venture with plant in France.
◦American Big Three (GM, Chrysler, Ford) still have lack of
LG (Korea)
Leading producer of lithium ion batteries
for cell phones.
momentum regarding EV, especially because of its application in
US Market.
Panasonic (Japan) Owns Sanyo Electric, the largest
producer of rechargeable batteries.
04 Fact Finding (BYD Company)
Innovation leader in Battery technology to cut the expensive cost.

1. Prefer low-cost labor than expensive machinery for more detail oriented.
2. Green Business as marketing and product cornerstone.
3. Factories located in low-cost labor location (India, Romania, Hungary) to press
the cost-efficiency of EV.
4. Has office representative near the major U.S costumer.
5. Consistent revenue growth (‘03 to ’08).
6. In 2015 became the EV Manufacturer leader with more than 43,000 vehicles
sold. (11% in market share).
7. In 2015 delivered 62,000 EV, almost entirely in China.
8. In 2016, deliver 6000 Electric Buses and built in BYD North America.
9. In 2015, the revenue of EV nearly 3 Billion USD.
05 Fact Finding (Future Issues and Strategy ) :

◦Focus on battery production and development.

◦Infrastructures for EV are still low compared to Gasoline Vehicles.

◦Charging station, and Battery replacement station need to be made quickly.

◦Need to compete with World’s Biggest Automaker :

◦Supply Chain : Need more distribution channel to cater potential market.
◦Europe.
◦North America. (US and Canada).
◦East Asia. (Japan, Korea).
◦South and SEA. (India, Indonesia, Singapore).
◦Australia.
06 Questions
Do you think electric cars may become viable alternative to
gasoline-powered vehicles? What is the future of electric
cars?
• Yes, especially in first-world country that have realized the environment importance of
electric vehicles to reduce carbon emission.
• With Government that applies the regulations that benefits Electric Vehicle (i.e. China),
it’ll drive the development for electric vehicles.
• The oil reserves will eventually go dry and force people to shift to Electric Vehicle.
• ◦The future of Electric Cars will be economic, eco-friendly, and reliable.
• The cost of production of EV has been fell sharply since the first time of its development.
(’08 to ‘20).
• The infrastructures of EV development began to increase greatly especially in EV’s market.
(US, China, Europe).
• The maintenance cost of EV will be much cheaper, since the development of its parts are
surging due to competition.
07 • The drawbacks still can be solved following the times and innovations :
• Shorter driving rang.
• Low battery mileage on single charge.
• More complex for the operation.
• Safety concern.
• High price tag.
• More expensive rather than gasoline.

Solutions
• One of the model of BYD’s car (e6) has the ability to go 300 km on a single
charge.
• The advance lithium battery will be more lighter, and faster charging
batteries (fully charged only by one hour), and safer.
• Lower cost can be achieved by the strategy of low cost of resources and
labors.
08 BYD SWOT Analysis

S W O T

Strength Weakness Opportunity Threats

1. Innovation Leader in Battery
1. The sales and 1. Manufacturing Plant located 1. Competitors start to innovate on
technology (cheaper raw
penetration relies in strategic location. (EU, their products to create cheaper
material and
alternatives.
heavily in China. US, and China).
environmentally friendly). 2. Other Brands with local-market
2. Unstable profit (The 2. Huge opportunity in
2. Cost-efficiency operation advantage, and steady OSC
sales was keep rising, unchartered market.
model, low cost labor factory infrastructure.
the net profit was still 3. •High demand of EV in some
location. 3. Low development in EV
fluctuate). developed countries. infrastructure in most countries.
3. Attention to detail.
4. Got international investors 4. Marked as Chinese Brand.
4. Market leader in EV.
with their achievement 5. Lower price of gasoline

5. Supports from the 6. Lack of efficiency in charging.

government.
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Operation and Supply Chain (Strategic Analysis)

Vision & Mission Objective
•Becoming the world’s leader in Electric Vehicle.
•Worldwide Sales & Services.
•Sustainable EV business cycle by having smooth supply chain processes, efficient and effective
operations are the goals that they should achieve to compete with the other competitors.

Strategic Analysis
•Expand the EV business that previously focused in China to new potential market such as Europe and North
America.
•New End-to-End plant in focused new market.
•From Manufacturing-Warehousing-Distribution-Sales-After Sales.
•Regular competitive analysis or benchmark.

Strategic Competitive Priorities

•Expand existing Manufacturing Plant (Europe and NA) to cater more potential business opportunity.
•BYD have Manufacturing Plants in Romania, Hungary, India and US.
•Right fit in terms of costumer preferences and target market.
•Huge opportunity based on Population and demography.
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Operation and Supply Chain (Strategic Analysis)

Major Steps Roadmap
•Invest in existing BYD Plant outside of China, so they can transform into End-to-End business cycle.
•Widen the scope of BYD Plant, from only Manufacturing to Warehouse-Distribution-Sales-After Sales.

Product Design
•Created different Products to suit the costumer’s preferences.
•Med-High for US and Europe market, enhance the existing product with some features addition.
•Low-Med for Asian Market, to break barrier of affordable EV’s in some developing countries. (India,
etc).Apply TQC strategy

Operations & Supply Chain Priorities

•Transform centralized SCM model to localized model.
•Cost and time efficiency in distribution and transportation.
•Accessibility for local market growth.
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Operation and Supply Chain (Strategic Analysis)

Implementation Projects
•Enact Romania and Hungary BYD’s Plant to complete cycle company representative.
•Build infrastructure for Europe Office so they can cater their localization business model.

Resources Needed
•Huge amount of investment.
•Supply of raw material and adequate technologies
•Capable labor and experts.
•Agreement with local government.

Project Funding Procurement

•Local government development plans partnership.
•Participate in Government’s project, especially ones with Green Technology initiatives.
•Try to partner with local investors to support this project.
•Like Astra with Japanese/BMW Automotive.
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Recommendations for BYD
Analyzing cost component. It is like finding what cost
that can be suppressed (rootcause)

Conduct benchmark with the competitors for the

right target of improvement
Improve their operations and supply chain
management to achieve the most efficient and
effiective process.
• Pursue opportunity to establish local market in potential market by creating local business model for
BYD
Innovate globally, act locally. • Applying mass customization strategy to support the ability of “attention to the detail” and meet
customers’ demand

Marketing and branding are also important to
promote the products.
Partnership for future.
• Environmental campaign should be announced, then people will be more aware with their environment
and health
• Partner with local investors, especially ones with automotive background to strengthen the position in
respective market.
• Join government’s project with other countries to stimulate Electric Vehicle initiatives (including the
support facilities)
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Thank You