Chapter 17 16. BYD: Diversified expansion of the kangaroo model

BYD Co., Ltd. was established in Shenzhen in February 1995. Within a few years, it has rapidly risen to become the number one rechargeable battery manufacturer in China and the second in the world, and has become comparable to international giants such as Sony.And strive to become one of the world's largest IT component suppliers in the next five years. Officially entered the automobile industry in 2003, BYD Auto followed the development route of independent research and development, independent production, and independent brand, relying on the company's strong technical and financial strength, fully integrated the production chain of the automobile manufacturing industry, and determined to create truly high-quality and inexpensive national vehicles .

F3, BYD's first self-developed mid-level model, has repeatedly achieved sales miracles since its launch in September 2006. In the first half of 2007, with an industry sales growth rate of more than 60%, it won the title of "No. 1 in output growth" and "No. 1 in sales growth." One", "No. 1 single product sales" three laurel crowns.Become the fastest growing mainstream auto company in China.It breaks the curse of layman's failure to build a car.It is even claimed that by 2025, it will become the number one in the world's auto industry. The king of the battery field seems to have become an upstart in the automotive industry.In the case of many "layman's car building" failures, BYD can stand out because of its unique "kangaroo model": concentrate internal resources, and quickly carry out strategic shifts after success in existing business fields.Using internal resources to multiply one new business after another like a kangaroo, the automobile business is a "kangaroo" cultivated by BYD.

BYD not only draws on the advantages of the battery and IT business, integrates the advantageous elements of each business group, but also integrates the upstream and downstream of the automobile industry, pursuing the development strategy of "followers and imitators". From entering the automobile industry in 2003 to its initial rise now, BYD seems to be taking a golden road. However, in the upsurge of "layman making cars" that emerged at that time, BYD was just the only survivor. Waves have flooded countless well-known companies. Oaks, Xiaxin, Midea, Bird, and even Greencool, which was in full swing at the time, all ended in failure and became the blood washing the altar.

It is said that heroes in troubled times come from all directions, but there is a big difference between the grass head king and the true man.BYD made its debut with the F3, and has now become a rising star of privately-owned cars other than Chery and Geely. What is the unique secret behind it? In the field of competition, the test of whether an athlete is great or not lies not only in his brilliance at his peak, but also in his stability and ability to replicate himself.In the NBA league, which is popular all over the world, Chamberlain not only created an unprecedented record of 100 points in a single game, but also became the early stage of the NBA with the scoring champion for 7 consecutive years; Jordan not only created a record of 63 points in a single game in the playoffs, but also used 10 scoring champions became the kings of the heyday of the NBA; and Kobe not only had the feat of 81 points in a single game, but also became the strongest among active players by scoring more than 50 points in four consecutive games.

The same is true in the corporate world.The greatness of GM is not only that it has ranked first in the world in the wealth list for five consecutive years, but what is even more frightening is that GM is one of the best in almost all expansion fields, and its ability to replicate new industries is unmatched.Whether it is Wal-Mart or Gome, the self-replication ability of a single store is also very important for its chain model to be successful. Undoubtedly, BYD is already the king in the battery field, but to surpass a single field and become a truly outstanding enterprise, it needs to test its ability and stability of self-replication.From the earliest production of batteries, to the production of mobile phone accessories, and now entering the automotive industry, BYD calls its development process "kangaroo-like effective replication."

Why is it called the "kangaroo theory"?Xia Zhibing, general manager of BYD Auto Sales Company, explained that kangaroos have three characteristics: long legs, pouches and self-running.Over the years, BYD has taken independent innovation as its core competitiveness and built up its long legs in terms of product differentiation. Wang Chuanfu, who comes from a technical background, attaches great importance to technology research and development. BYD is not only the first in strength, but also has a leading edge in technology research and development, even on a global scale. BYD has always attached importance to technology, and its annual patent innovation ranks at the forefront of the country. The outstanding technical capabilities enable BYD to make great strides forward on the road of integration, absorption, digestion, and independent innovation.Electronic research and development is BYD's specialty, which is especially prominent in the 99,800 yuan flagship F3: the vehicle's GPRS satellite positioning system is all independently developed by BYD.The refinement in the IT industry has also been transplanted. The interior of the F3 is extremely meticulous in workmanship.

After BYD entered the automobile industry, it first built a testing center in Shanghai. This "redundant move" was extremely far-sighted. Chery Cowin was smashed into a pile of scrap metal during the collision test in Russia.After entering the automobile industry, BYD's first consideration was to build a test platform first to avoid similar tragedies.To this end, a test track has been built in Shanghai and Xi'an bases, and testing laboratories such as collision laboratory, road simulation, rain, high temperature, comprehensive environment, and anti-interference have also been built.

F3 has done a lot of tests before it goes on the market, such as durability test, putting sandbags and stones in the car, running in the test track for 24 hours, and the car is not resting. It is this kind of stupid method that guarantees the quality of F3.Make it a mainstream classic of domestic cars. At present, BYD's R&D center is also in Shanghai, with more than 3,000 R&D personnel, and 60% of the production equipment has achieved independent research and development.Compared with other domestic auto companies, this ratio is astonishing. While they are selling F3, a series of new products are being tested.

In Beijing, BYD established the largest mold center in Asia, which laid the foundation for vehicle manufacturing. In addition, BYD also produced enterprise molds for international giants such as Chrysler in the United States. In comparison, in July 2007, Chery Automobile and Fiat Automobile had There was a dispute over the mold issue, and it was precisely because Chery did not have its own molds that its model development was subject to others. The growth rate of BYD Auto last year was 500%, and this year's plan is 150,000 vehicles, an increase of 250%.If the annual growth rate of 100% can be maintained, the annual sales volume will exceed one million by 2010.After the listing in the future, automobiles will replace batteries and become BYD's largest industrial pillar.

From producing batteries to making cars, BYD has reproduced one new business after another like a kangaroo. The car is only the youngest one, but it has inherited BYD's genes. "You are born in the prime of life". In 2003, with the final completion of the listing, BYD reached the pinnacle of the battery industry, looking around, no one came after.For a company that has become the number one in the industry in less than 10 years, continuing the battery industry obviously cannot satisfy its ambitious ambitions. Large-scale transfer and adjustment of industrial layout has become BYD's natural choice.

BYD's expansion from the battery field to the automotive field is a reverse expansion from a low-threshold industry to a high-threshold industry. There are inherent limitations and risks, so that when BYD acquired Xi'an Qinchuan, the stock price surged by 20%. However, BYD became an anomaly in the end. Why BYD can succeed while others fail?Comparing BYD with several other companies entering the automotive industry, we can gain insight into the hidden secrets behind the successful industrial transfer. Midea, Oaks, Bird, etc. are all in a perfectly competitive industry. For them, they can expand against the trend, and the pressure is huge. In addition, their main business field has not established an absolute competitive advantage. Industrial transfer is more like It is to fight on two fronts, and it is easy to get into trouble.BYD has established an absolute competitive advantage in the battery field, and in the short term, no other competitor can surpass them. And it is also in an absolute competitive position. Why did Galanz's transfer to the air-conditioning industry fall into a stalemate, but BYD succeeded?This question involves another topic, that is, the choice of the industry itself. When Galanz entered the air-conditioning industry, the air-conditioning industry had already matured, and Galanz’s expansion against the trend was undoubtedly a wave of waves. In the domestic auto industry, due to policy restrictions, excellent foreign brands could not enter China completely, but had to Joint ventures with state-owned monopoly giants such as FAW, it is obvious that joint venture brands are not the best choice under the market economy system, while in the private sector, only Geely and Chery have achieved success. As a semi-open field, its future has huge room for development . BYD's choice of the automobile industry seems to be a powerful and unconstrained style, but in fact it is scattered and the spirit is not scattered. The aggregation effect can occur between various businesses in the entire industrial chain.The rise of Japanese automobiles has a lot to do with the widespread application of electronic devices in automobiles. The electronic control systems installed in their automobiles can operate safely and reliably.Similarly, BYD's leading advantages in the fields of electronic components, molds, and vehicle batteries enable BYD to first grasp some parts with core competitiveness, and then form the integrated advantages of the whole vehicle, creating a peak that ordinary private enterprises cannot surpass. From this, we can see that BYD's successful industrial transfer has several unique foundations: first, it has established an absolute competitive advantage in its main business, making it difficult for competitors to break through in the short term, and avoiding the worries of two-front warfare , bought time for the maturity of the new industry, and created a "protective bag" for the mother body; secondly, in terms of industrial layout, we chose industries that are in the early stages of development and have great future potential, so that we can quickly complete the original accumulation without falling into a long-term The quagmire of war.Third, it is different from most domestic enterprises in that BYD has always paid attention to technology research and development, so that it has a strong technical reserve in the field of new industries. BYD appeared as an imitator from the beginning.In the field of batteries, BYD has been competing with Sony for a long time. From imitation at the beginning, it has surpassed Sony in many fields. BYD is taking a road from imitation to surpassing. In the automotive field, BYD began to imitate Toyota.As a former latecomer, in the early days of entering the automobile industry, Toyota adhered to a belief: imitation is easier than creation, and it must first produce safe and economical cars, rather than innovative products, because these are more in line with the public's perception of cars. The most basic needs. The essence of the reason why Chinese automobiles can learn from Japan and South Korea lies not only in borrowing the general principles of latecomers, but also in the similarity of market stages.Toyota rose during the period of Japan's economic take-off and consumption upgrade.The current Chinese auto market is still in the early stage of explosion. Even with an average annual growth rate of 50% at a super high speed, by 2010 the number of Chinese auto ownership will only be 10%, far from reaching the level of popularity.More importantly, the current urban elite will be diluted, and ordinary people will become the mainstream of consumption. The huge and fundamental changes in the future consumption structure will create a vast and unbalanced future market that targets ordinary people. Huge inclusiveness. This is an era dominated by demand.Meeting needs is more important than technological innovation. In view of this, BYD's strategy is to imitate as much as possible in terms of technology, supplemented by a certain degree of innovation, and implement a low-price strategy in terms of price to quickly seize the market. The "Wish" minivan, which went on sale in early 2003, is modeled after Honda's "Stream"; the "Vitz" compact car is modeled after Honda's "Fit."The appearance similarity between its main model F3 and Toyota's ninth-generation Corolla exceeds 90%, which is amazing.Buying a Jetta is easy for people to see that he bought a car worth 80,000 yuan, but what happens after buying a BYD F3 and replacing it with a Toyota logo?I believe that most people will think that he bought a Toyota Corolla.In this regard, BYD has a good insight into the psychology of consumers. From the similarity between the F3 and the Corolla, to the similarity between the F3R and the Shanghai GM Excelle HRV, and then to the F6 Excelle Accord hybrid, every BYD car will choose a platform that it believes is the best competitor, and then based on this product imitation. BYD's strategy is "flying with both wings". In the future, it will develop some high-end products. BYD F6 and F8 will be BYD's strategic products in the automotive market to advance to the field of mid-to-high-end sedans. The initial prices are 150,000 and 200,000 respectively.Among them, F8 is China's first sports car with a hard-top convertible mechanism, and there are no more than five domestic companies that can master this technology. At the same time, BYD moved the other end down to cut into the lower-end market. The first model BYD launched in 2008 was the mini-car F1. F1 has two displacements of 0.8L and 1.0L, and the price is about 20,000 yuan.BYD's goal is to make the F1 the cheapest car in China. BYD announced that it will become the number one in the world by 2025. To have extraordinary achievements, not only extraordinary people must do extraordinary things, but also extraordinary timing. In many cases, the birth of future giants is not in the initial stage of the industry, nor in the mature stage, but in the transformation stage.This is the case for Changhong in the color TV industry and Galanz in the microwave oven industry.At present, China's auto market is also in a transitional period, from a semi-monopoly and semi-open market to a fully competitive market, from elite consumption to mass consumption, and the entire market will explode with enormous energy. Back then, Ford Motor could become a corporate giant in response to the global wave of business only when it released mini-cars. Similarly, in the period of market explosion, companies that lead the industry's popularization trend can rise rapidly.In the future, it may be more sensible to take Ford as an imitation object and be the leader in the field of mini cars, rather than a challenger in the high-end field. In the field of mass consumption, China's number one may be the world's number one.