Summary
- BYD is taking over its distributor in Germany, allowing it to sell cars directly in Europe’s largest auto market
- The deal will give BYD more control over pricing and key parts of distribution in Germany
- BYD plans to control 5% of the European auto market by 2026, with Germany being a crucial part of this goal
- The move comes after the EU announced plans to cut BYD’s EV import rate from China
- BYD aims to boost sales in Germany through more control over pricing and distribution, potentially matching Volvo’s growth in the market
Article
China’s leading electric vehicle maker, BYD, is expanding its presence in Europe, particularly in Germany. BYD recently signed an agreement to take over its distributor in Germany, allowing the company to sell its cars directly in Europe’s largest auto market. This move will give BYD more control over pricing and distribution, as well as the ability to set prices on its own terms. In addition to taking over distribution, BYD will also acquire two flagship stores in Stuttgart and Frankfurt.
The deal with Hedin Mobility Group, expected to close in the fourth quarter of 2024, is part of BYD’s ambitious plans to control 5% of the European auto market by 2026. As of July, BYD only accounted for 0.1% of vehicle registrations in Germany, but aims to sell 120,000 vehicles in the country by 2026. With more control over pricing and distribution, BYD hopes to ramp up output and achieve its goals in the German market. This move is part of a larger trend of Chinese automakers, including XPeng and SAIC’s MG, expanding into Europe.
Taking control over distribution in Germany is a significant win for BYD, as it allows the company to set prices with more flexibility and availability. The move comes as EV registrations in Germany fell 36.8% last month, dragging Europe’s overall EV market share down. Volkswagen, a key player in the European auto market, also saw lower sales in July and is seeking to cut costs by potentially closing Audi’s assembly plant in Brussels. Meanwhile, Volvo led Europe’s new car registration growth, driven by strong sales of its cheapest EV, the EX30.
With the ability to set prices and control distribution, BYD may be able to match Volvo’s growth in the European market. Research shows that BYD earns more profit per unit sold in Europe compared to China, despite higher tariffs. This flexibility in pricing could give BYD an advantage over competitors like Volkswagen. It will be interesting to see how the deal impacts BYD’s sales in Germany next year, as the company looks to overseas markets to boost growth. Overall, BYD’s expansion in Europe reflects the growing presence of Chinese automakers in the region and their efforts to gain market share in the competitive European auto industry.
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