Friday, January 16, 2009
BYD cars - A Small Showing, but With Big Dreams
DETROIT — For the first time, two Chinese carmakers are exhibiting this year on the main floor of the Detroit auto show, a promotion of sorts from the usual spot they were given for previous shows in the convention hall’s basement or lobby.
One of those carmakers, BYD, a Chinese manufacturer that produces many of the world’s cellphone batteries and only began selling cars in 2003, also upgraded its ambitions, saying it would be the world’s largest automaker by 2025.
Few people here are willing to dismiss its goals as absurd.
“They are very competent in the battery business,” Nick Reilly, president of the General Motors Asia-Pacific region, said of BYD. “I think they’ve got a fair way to go on the car side of the business. But they are certainly not to be ignored. They have a great deal of support from the Chinese government.”
Brilliance Auto, which has relationships with BMW and Porsche, is the other Chinese carmaker on the main floor.
BYD, which stands for Build Your Dreams said that by 2011, it planned to begin selling in the United States an electric crossover vehicle with a 250-mile range and a plug-in hybrid vehicle. It started selling a smaller version of the plug-in hybrid in China last month, almost two years before the Chevrolet Volt is scheduled to go on sale, and a year before Toyota says it will introduce a plug-in vehicle.
“We think it’s quite practical and can do well in this market,” the chairman of BYD, Wang Chuanfu, said in an interview. “We are a company that, when we set a target, we’re going to make it.”
Analysts are not so sure that BYD or any other Chinese manufacturer is that close to arriving in the United States. Similar promises by companies like ZX Auto, which vowed during last year’s Detroit show that its vehicles would arrive stateside by the end of 2008, have fallen short.
Mr. Wang said BYD was studying how to establish a dealership network, which analysts said could take longer than expected.
“They underestimate how much it’s going to take to break into the market,” said David Champion, director of auto testing for Consumer Reports. But Mr. Champion called some of the vehicles, “very impressive.”
Brian Johnson, an analyst with Barclays Capital, expressed skepticism about the companies’ lofty claims, though a recent investment in BYD by Warren E. Buffett’s holding company, Berkshire Hathaway, has considerably increased its credibility.
“They’re making five-year leaps every year,” Mr. Johnson said. “But the interiors and styling still need work.”
Executives from Brilliance said they planned to export vehicles to North America, Europe and Russia but gave no time frame for entering the United States. For now, Brilliance is gauging reaction to its cars and learning about the market.
The Detroit show “is an excellent platform to measure ourselves against international standards,” said He Guohua, a Brilliance vice president.
The company, which said it has 35,000 employees and $4.5 billion in assets, is showing four cars in Detroit, including a sports car and a luxury sedan.
“They are all really nicely done,” Mr. Champion said.