BYD shakes up the established order by acquiring its German distributor
This page is translated from the original post "BYD bouscule l’ordre établi en rachetant son distributeur allemand" in French.
- 02/09/2024 12:09
There’s no place like home. BYD seems to have embraced this maxim by purchasing a distributor instead of creating a network.
It could also be said that a small home is better than a large one elsewhere, but BYD’s approach is more akin to settling into a big home! For ages, the automotive industry has relied on a well-established model. A manufacturer produces cars, and a network distributes them. Thus, in France, you can buy both an Alfa Romeo or a BMW, as well as a Kia or a Nissan from Neubauer. The Schumacher Group, now known as Car Lovers, distributes Volvo, Dacia, and Skoda. This model allows manufacturers to focus on what they do best without overwhelming their sales divisions. They do have some dealerships under their own name, but the distribution model satisfies everyone.
Nothing fears BYD
However, BYD has just shattered all of this by announcing the acquisition of Hedin Mobility Group, its distributor in Germany. The partnership between the two companies initiated in August 2022 thus takes an unexpected turn. On paper, all distribution activities for BYD vehicles and spare parts in the German market are transferred to BYD Automotive GmbH. On the ground, nothing changes except that the buildings and equipment now belong to BYD and the employees have a new Chinese employer. Incidentally, all revenues now go directly to the brand, which is free to set its prices directly.
With additional customs duties limited to 17% versus 37% for MG, BYD is already in a strong position to achieve its goal of controlling 5% of the European automotive market by 2026. Given that the world’s largest manufacturer of electrified vehicles currently holds less than 1%, this is more than ambitious. However, this new initiative clearly demonstrates BYD’s unwavering determination, as we are talking about a deal worth several million euros. And what about the planned factory in Hungary that would simply eliminate customs duties applicable only to models built outside the European Union!
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