BYD to challenge Korean cars in the Middle East

Dubai: Chinese car manufacturer BYD (Build Your Dreams) is pursuing ambitious sales targets in the Gulf Cooperation Council (GCC) countries.

According to Marketing Manager Paul Lin, the company aims to sell more than 10,000 cars annually in the region after it started only two years ago.

"With our new model series in line, we are now looking to address our target groups," Lin told Gulf News in an interview at the Dubai International Motor Show.

BYD will offer four models in the GCC, all of them affordable passenger cars, and is positioning itself among Korean competitors such as Hyundai, Kia and Chinese Chery.

"We have to be cheaper than the Korean cars," Lin says. "Or, let's say, offer better value for money." He says that the sales price will be 10 to 20 per cent lower than the Korean brands.

BYD has strong ties with the Middle East. There are factories in Syria, Egypt, Turkey, and soon in Iraq, and it "hopes to be the strongest Chinese brand in the region", says Lin.

The company claims to have become the largest carmaker in China after it was established in 2003. It is part of the BYD Co Ltd, a large battery manufacturer listed on the Hong Kong Stock exchange. Its core business is still the production of batteries and the contract manufacturing of IT components for customers such as Motorola, Nokia and Samsung. In the car segment, BYD has a current line-up of eight models, ranging from a small city car to mid-sized passenger cars and a minivan. In addition to it, BYD produces electric cars, either as plug-in hybrids or pure electric cars.

Buffet buys in

This was possibly one reason why investor Warren Buffett bought stakes in BYD in 2008 and now holds 10 per cent of the company. The rest is owned by BYD's chairman. "We are a private company," Lin says. "The Chinese government does not own any stake whatsoever." As of now, BYD will be selling only cars with gasoline engines in the Middle East, but is planning to introduce its electric models in the future.

"We are in talks for fleet sales, for example with the Abu Dhabi government," Lin says. At the moment, only a "small number" of electric or hybrid cars have found their way to the region. But the expertise in hybrids and batteries remains a big asset for BYD as it plans to mass produce affordable electric vehicles in the near future. One of it is the plug-in hybrid, a car that can be recharged by using a plug that is connected to an external power source. Another market could be solar energy-powered electric vehicles.

According to Lin, BYD currently sells 450,000 cars per year, 80 per cent of them on the Chinese market, the rest mainly to Europe and the US.

Interestingly, BYD showcases its S8 model at the Dubai Motor Show, which has strong similarities to the Mercedes CLK at the front. Other BYD cars seem to be lookalikes of Toyota, Honda and Lexus. "There are no legal issues with Mercedes," Lin answers briefly when asked about the obviously related design elements.

However, Guangzhou-based BYD has posted a net profit of 2.34 billion yuan (Dh1.26 billion) from January to September, up from 777.8 million yuan a year earlier.

Wang Chuanfu, founder and chairman of BYD, tops the 2009 Forbes list of the richest people in China, after his fortune increased to 39.6 billion yuan (Dh21.29 billion).