BYD Is Vanguard of (Smaller) Chinese Invasion

A few years ago, Chinese automakers seemed poised to follow the well-trod path of the Japanese, Germans, Swedes, Koreans and even Yugoslavs to smashing success in penetrating the U.S. market as importers. 

But these days, BYD stands practically alone as a Chinese brand that is poised to make any kind of impression on American car buyers. And even that is slow in coming.

BYD — an acronym for “Build Your Dreams” — was the sole Chinese exhibitor at the recent North American International Auto Show. Partially owned by Warren Buffett, who has a 10% stake, the Shenzhen-based company hit the Detroit Auto Show for the fourth straight year.

The number of Chinese brands represented at the Detroit Auto Show dwindled to just one — BYD — this year, down from five in 2008. (Volvo, which was sold to China-based Geely last year, was an exhibitor but not in Chinese guise.)

The Great Recession seems to have played a role in the shakeout. And even these days, the United States doesn’t look like such an easy mark for inexpensive small-car imports from China — partly because American auto-labor costs are going down and Chinese labor costs are going up.

BYD also has evolved its approach to the U.S. market after some fits and starts. It didn’t meet its goal of introducing a battery-powered crossover vehicle in the U.S. last year. At least year's Detroit Auto Show, BYD Chairman Wang Chuanfu had announced his intention to build a U.S. headquarters in Los Angeles and establish a test fleet of 10 electric vehicles in California.

Chuanfu commented at this year's show that BYD finally plans to enter the American market next year. And given the Los Angeles-sized emissions problem that afflicts urbanized areas of China, it’s hardly surprising that BYD is focusing on all-electric vehicles both domestically and for foreign markets.

Another headache for Wang: BYD also has had problems meeting its sales and market-share goals in the Chinese market.

Recalibrating and moving forward determines success in the brutally competitive global automotive market. That's why Wang has unveiled dealer-friendly plans, and is developing a compact sedan that could hit the market next year, both moves part of the brand's strategy to goose sales and market share.

For the moment, however, BYD has yet to prove that the Sage of Omaha made a good bet.