The ‘truth’ about BYD – replication, cost cutting, and car production
Caixin magazine have run a very interesting story on BYD’s business practices which detail BYD’s alleged copyright infringements, and cost cutting business practices:
Auto technician Li Xuelin never dreamed of dismantling his boss’ Mercedes Benz S300. But one day, that’s exactly what the boss ordered Li and a half-dozen colleagues to do.
It wasn’t easy. At first, the technicians just stood beside the shiny black car, daring not to touch it. But eventually their boss and BYD CEO Wang Chuanfu broke the stalemate.
Wang stepped up to the car and, with sweat on his brow, gouged the paint job with a car key. “Now you can start,” he said.
Li’s team disassembled the car, piece by piece, to reverse engineer the luxury car’s electronic control system. It was a painstaking but money-saving project that’s now become a trademark for Wang and BYD, a highly successful Chinese manufacturer that’s proud to be a master copyist.
Since its launch in 1995, BYD has expanded from OEM battery manufacturing into various unrelated fields including IT products, autos and new energy. Li’s experience with reverse engineering Wang’s Benz has been repeated at many levels by BYD’s army of about 30,000 engineers and technicians.
By reverse engineering products made by others, BYD pushed its way into manufacturing production, eventually expanding upstream and downstream in chosen fields to build a profitable, vertically integrated enterprise. BYD won big wherever its elbows went.
BYD’s success as a revolutionary copyist has drawn mixed reactions, but of course business champions seldom pay heed to grumblings from those they defeat. When carmaking, for example, BYD found that reverse engineering can cut the cost of a new vehicle by more than one-third.
BYD-Style Imitation
Last May, the city of Xian started switching its taxi fleet to the BYD F3 car, which at first glance could be confused with a Toyota Corolla. Indeed, the F3 is an inside-outside copy of the Japanese manufacturer’s small car but costs only half as much.
BYD isn’t shy about its business practices. In the F3′s introductory period, the company marketing department touted Corolla similarities as a sales point. At some service centers in the city of Zhengzhou, F3 owners could spend a few hundred yuan to have the exterior badge swapped with a Toyota logo. And last year, after just five years in production, annual F3 sales reached 300,000 units, making it one of China’s best-selling cars.
To develop good cars in the shortest time possible, BYD spends tens of millions of yuan every year buying and then dismantling the newest models built by manufacturers around the world.
That’s also how Wang set up the company’s first battery production line. In those early years, a fully automated Ni-Cd battery production line from Sanyo cost tens of millions of yuan, so Wang decided to make one himself. He reverse-engineered the setup for an identical production line that cost only about 1 million yuan.
Wang decided to move into autos in 2002, and the following
January his company bought a 77 percent stake in Shaanxi’s Qinchuan Auto Co. “A car shouldn’t cost so much,” he told his investors at the time, before revealing that he’d already dissected a large number of motor vehicles as part of his imitation quest.Copying was in Wang’s blood. After a 2003 visit to BYD’s Songjiang laboratory in Shanghai, for example, a former Chery Auto expert noted that he saw only two pieces of lab equipment that had been imported; the rest were Chinese-made imitations of foreign equipment.
How can simple imitation win a market? The Chery veteran said BYD strategy’s is based on focus, brazenness and precision.
Rather than waste effort creating new models for the sake of variety, a limited number of resources are spent on developing key products. That’s the company’s focus. As a brazen market player, BYD picks best-selling products and blatantly copies them, head to toe.
The company also works to rigidly control costs and quality, and learns by doing. “BYD’s excellent quality imitation cars are tied to the fact that the company has accumulated experience in strict product control from its earlier practices in batteries and the IT sector,” the Chery source said.
“Maybe it’s right. They very well may become China’s flagship auto manufacturer.”
Unwelcome Buyer
BYD delights and frightens suppliers at the same time. Many have discovered that BYD typically makes one or two serious, large orders of models, materials, or components but never orders again. That’s because it just starts making whatever it bought.
This kind of vertical integration is a cost-cutting measure. And it worked well in the battery business. BYD overtook Japan’s Sanyo in just a few years to become the world’s largest supplier of Ni-Cd batteries, and eventually became the second largest provider of Li-Ion batteries.
BYD rose to a new extreme when it got into automotive manufacturing. The company went against an industry trend that started in the late 1990s, when the world’s major auto manufacturers were turning to outsourcing to increase efficiency and lower risk.
Auto stamping offers a good example of BYD’s strategy. The company obtained a complete stamping plant when it bought Qinchuan, eliminating the need for expensive outsource production of new car body parts, which can take two years and cost 200 million yuan. As a result, BYD started making new stamps in eight months for 80 million yuan, and now it’s building a third stamping plant near Shenzhen.
“Why are our cars so cheap?” retorted a mid-level staffer at BYD. “Money is saved on every part, from engine to dashboard.”
This do-it-yourself attitude stretches from manufacturing to distribution to sales. True, BYD’s homemade company ads are a little rough around the edges. But it spends only about 20,000 yuan to build a lighted, outdoor ad which, if outsourced to an advertising agency, could cost more than 400,000 yuan.
Hands-On Success
When U.S. billionaire Warren Buffett invested in BYD in 2008, major transaction player and MidAmerican Energy Holdings CEO David L. Sokol visited BYD’s Shenzhen battery workshop. He was surprised to discover employees sitting on rows of workbenches – like 18th century seamstresses – busy producing millions of batteries every year with simple tools and bare hands.
Indeed, from the start, low-cost labor has been integral to Wang’s strategy for overtaking Japanese competitors. He uses people instead of machines wherever possible, supplementing humans only when necessary.
BYD is proud of this operational model which it weaves into unique staff recruiting practices. In addition to laborers, the company hires top engineering students, sometimes an entire university class immediately after graduation, as well as capable engineers and retirees with extensive experience.
In a 2003 television interview with official CCTV, Wang said he thought labor costs plus market advantages were keys to success for Chinese enterprises.
At the end of 2009, according to BYD’s official statistics, the company had more than 140,000 employees, including more than 30,000 engineers.
After buying of Qinchuan, Wang brought his literally “hands on” manufacturing approach to the automotive sector. Now, even in usually high-tech areas such as painting, most jobs are done with manpower. BYD’s F6 assembly line in Shenzhen, for example, employs a sizable staff of 220 people.
“Whenever manpower can be used, they won’t use machines,” said a source close to BYD.
And the strategy began with batteries. Unlike box-shaped Li-Ion batteries made by many other companies, BYD’s are column-shaped because they are made manually. Box-shaped batteries require automated equipment.
Today, a BYD battery line employs more than 100 people to do the same work handled by 50 people in China’s most automated mobile phone battery-maker, Shenzhen’s BAK Battery.
A former BYD employee said relying on manpower for mobile phone batteries results in a higher waste rate, usually between 20 and 30 percent. A similar, automated production line in Japan would have an elimination rate closer to 5 percent. But to Wang, the waste rate is completely acceptable because it can save hundreds of millions of yuan.
Growing Pains
There’s no doubt BYD’s market share and sales are increasing. However, there are still debates about the sustainability of the company’s magic, low-cost wand.
The debates haven’t affected BYD’s bank credit rating. A high-ranking official at the Shenzhen branch of China Development Bank said the bank isn’t worried about BYD, noting other businesses such as telecom equipment giants ZTE and Huawei had shaky starts.
The bank has confidence in BYD because it gets substantial financial subsidies from the government for environmental protection programs. In addition, the company’s Li-Ion battery business is profitable.
But Wu Jinghui, a senior manager at market analyst A.C. Kearney, notes that automation offers uniformity in output and quality, while manpower poses risks for manufacturers. And a strictly manpower strategy is considered untenable for electric cars and new energy markets.
BYD officials understand Wu’s point. Eventually, the company may be heading down the road to automation, especially in the electric car and new energy arenas. By then, holding down costs will have become an even bigger challenge for BYD.
Yet, as of last year, most of BYD’s 5 billion yuan in automated production facilities were self-built.
Intellectual property right is another sticky issue, since most BYD cars pay homage to other manufacturers’ products.
BYD booths at car shows have been frequented by Toyota employees taking photos and collecting data. “It appears they’re building a case,” said an individual familiar with the international car market.
In the past, other Chinese automakers such as Chery and Great Wall have had to confront IPR charges and lost lawsuits in the United States and Europe, leading to export restrictions.
Wang has often stressed that his company imitates but does not plagiarize, arguing that South Korean and Japanese car manufacturers got their starts the same way.
In hopes of skirting patent issues, BYD has a team with hundreds of people who study global patent intricacies. At the same time, BYD has begun applying for large numbers of patents; it was the biggest applicant after Huawei and ZTC in Shenzhen last year.
BYD Sales Vice President Wang Jianjun says every automaker has to find its own path slowly. He notes that BYD is coming out with six, new models in 2010, all mid-range cars costing more than 100,000 yuan.
“You’ll discover that these new makes don’t resemble anyone else’s models,” he said. “We made them ourselves.”
Besides this particular article, Caixin also have another article on BYD’s mystical BYD E6, they raise interesting questions about the upcoming BYD E6, and how they’ve managed to jump over established car companies such as Nissan and GM in the electric car race:
The market had waited with bated breath for years before the anticipated pride of Chinese carmaker BYD finally appeared on a Ministry of Industry and Information Technology (MIIT) annual list of new autos in early January.
Listing the E6 in MIIT’s 2010 catalogue put what’s still largely a secret vehicle in line for a final permit process, which should gradually answer persistent and sometimes troubling questions about the car’s technology, market goals and proposed commercial model.
BYD claims it has developed the world’s leading electric vehicle and battery technology. But the technology has yet to be verified beyond the company’s shadowy walls by industry and technical organizations. And so far, scale models of the E6 and BYD’s plug-in hybrid F3DM have been seen only at auto shows.
Despite unproven claims, BYD’s stock value has risen 10 times since U.S. billionaire Warren Buffet made a high-profile investment in the Shenzhen-based company in 2008. The attention catapulted its image into the stratosphere as a new energy vehicle company.
But to this day, no one outside the company really knows much about BYD’s research into electric vehicle technology or whether its promise will ever become a reality.
BYD officials say they don’t want to reveal trade secrets. But many in the industry have raised doubts, pointing to the fact that some automakers including Nissan and Daimler, which plan to start mass producing electric vehicles this year, have long offered their products for test drives.
The mystery gets even more profound when one considers that Wang Chuanfu, BYD chairman and CEO, once admitted on Chinese television that even without accounting for research costs, the company would lose 20,000 yuan on each F3DM sold.
Claims, Counterclaims
BYD has said the E6 will be able to travel 300 kilometers on a single charge — much farther than electric vehicles developed by Nissan and Ford. Skeptics say BYD’s numbers have yet to be confirmed by third-party testers, and some in the industry say an E6 could only achieve 300 kilometers by adding an extra battery pack.
BYD says charging an E6 battery generally requires eight hours, and that a high-current, fast charge can take about 15 minutes, outstripping Nissan’s electric model.
But BYD’s claims have raised technical issues. For example, Feng Fei, head of the State Council Development Research Center Industry Department, said fast-charging may slash in half the lifespan of an auto battery – usually about 1,000 charges –
and greatly increase an electric vehicle’s costs.In a speech at Peking University on January 9, former Dongfeng Motor Corp. president and MIIT Vice Minister Miao Wei criticized some electric car companies and their experts, whom he said try to fool laymen by only releasing information that’s to their advantage. For example, Miao said, some leave out the facts that long driving distances are achieved by adding battery packs, and fast-charging reduces battery life.
Sources at the China Automotive Technology and Research Center say no tested, domestic-made electric vehicle has simultaneously met targets for driving range, battery weight, failure rate, maximum speed and battery life.
Electric car developers are racing to close the performance gap with traditional cars with internal combustion engines. But they still lag far behind in areas such as driving distances per fill-up, which a survey by the consultancy McKinsey found is among the foremost issues for consumers in Shanghai when considering electric vehicles.
Barriers to Mass Production
Manufacturing an electric vehicle is not difficult, but it’s a challenge to mass produce battery-powered cars at low cost that can guarantee safety. And to date, there’s been no indication that BYD can mass produce electric vehicles, given its inability to find a commercial solution to battery consistency issues.
A Shenzhen Development and Reform Commission (SDRC) source close to BYD said the company has not put an electric car into mass production because of its inability to ensure battery supplies. He stressed the problem was not technical, but that the company just needs more time.
The source insisted the E6 would reach “a certain scale” of mass production in 2010. Generally speaking, 10,000 vehicles is a basic industry qualifier for mass production. It’s unclear whether the F3DM or E6 will reach that mark.
Speaking to Caixin Online, BYD officials said their battery production methods are automated, and that they have full confidence in their manufacturing system. But they declined to provide direct proof of these and other claims.
Cao Jianhua, vice president of Shenzhen B&K Rechargeable Battery, said BYD probably runs only a single production line that builds two F3DMs per day. He also noted the E6 is still in the prototype stage.
Cao said a battery comprises up roughly half of an electric car’s weight and cost, and according to his projections the E6 may require as many as 1,600 batteries. The challenge for BYD, he said, is to guarantee the quality of each car’s 1,600 batteries while maintaining low costs.
Experts say ensuring battery consistency and safety requires automation and high-quality materials. So far, however, BYD’s success has been built on leveraging China’s low-cost labor, using people instead of machines in the production process.
Shen Yang, director of investment banking strategy for Beiqi Foton Motor Co., a Chinese auto manufacturer with early investments in new energy vehicle research, calls BYD a “battery king” with distinct advantages in single-cell batteries. But he said the company lacks a competitive edge in the areas of battery pack management, electronic control technology and vehicle integration technology.
Mao Huanyu, general manager of Shenzhen BAK Battery, said BYD in the past mainly produced single-cell mobile phone batteries but never ventured into the field of notebook computers, which use six- or seven-cell batteries.
An electric car needs hundreds or thousands of cells, so consistency is paramount. “So far, I have not seen a technological bright spot for (BYD) in terms of integrating multiple batteries,” Mao said.
Government Business
BYD and other electric car hopefuls also must overcome the infrastructure hurdle. For example, charging stations and other supporting facilities will be needed before the ubiquitous electric market takes off. Questions about the form of this infrastructure, investment sources, and their likelihood remain unanswered.
But local support is in place. A SDRC source said the city of Shenzhen plans within four years to buy 2,000 electric cars from BYD for use as taxis. And the Pengcheng Taxi Co., a subsidiary of Shenzhen Bus Group, plans to jointly establish an electric vehicle servicing company with BYD. BYD’s investment would consist of 100 E6s, while the bus group would handle company operations.
To offset the high cost of electric vehicles, the source also said policy subsidies for the E6 are under discussion. The government plans to provide a 50,000 yuan subsidy for each E6 purchased, and is currently choosing between two subsidy programs: a direct subsidy to buyers, or subsidies to the manufacturer. Additionally, the government plans to offer electric vehicle drivers half-price parking and highway toll discounts.
If its electric vehicle business is forced to depend on government subsidies, BYD will need more friends than Shenzhen officials. But local car companies already have connections and stakes in Beijing, Wuhan, Guangzhou, Chongqing and other major urban centers. Each city government is likely to offer preferential treatment to a hometown favorite, and BYD is a latecomer in China’s crowded public transportation sector.
Competition among government departments may be another challenge for BYD. For example, Science and Technology Minister Wan Gang has long supported electric vehicles as a target for state investments. But officials at MIIT, which oversees the automotive industry, advocate energy-saving and emissions-reduction solutions for traditional auto technology given the immaturity of new-energy technology.
Perhaps aware of the complexity of the policy environment, BYD has adopted a maverick, behind-the-walls business style. Its officials also have been keen to lobby the government; in recent years, the company has frequently invited national leaders and industry experts to inspect its facilities.
BYD’s development strategy called for evolving from small beginnings as an OEM maker of cell phone batteries to a become a manufacturer of autos, from traditional to new-energy vehicles, including electric cars. Many industry insiders and investors are bullish about this path.
But a slow start for the electric vehicle market and an uncertain future are putting pressure on BYD. And the pressure will only rise as CEO Wang and his team seek a genuine market solution.
Some investors are speaking with their wallets. After BYD received MIIT approval for the E6, the company’s stock fell to HK$ 55.80. It had reached a high of HK$ 85 in 2009.
At this point, Mao of Shenzhen BAK, said the company’s veiled approach to public relations, product development and technology may be hurting.
“Technology will depreciate over time,” he said, but practical applications help technology develop. Persistently holding back a new product to protect a secret technology is simply illogical, Mao said.
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This is a fantastic article, and illustrates Chinese automaker’s problem of coming to the US and Europe.
As you have seen from Toyota’s fiasco, it only takes single screw up to ruin a brand.
In case of Chinese brands, the market’s judgment is even harsher because they are seen as “Chinese car” before they are seen as Cherys and BYDs. It only takes single automaker to ruin the brand of all Chinese automakers.
If Chinese government is smart, they would actually inspect and monitor Chinese cars that are exported.
They haven’t screwed up so far, and are expanding at a rate unseen before by Korean and Japanese auto makers.
It will be interesting when BYD tries to turn their business around to be a global player. Sounds like they only think short term with their business practices and make outrageous claims on world domination.
Toyota also had re-engineered a Mercedes in creating their Lexus brand of cars 20 years ago.
@ China #1
> Toyota also had re-engineered a Mercedes in creating their Lexus brand of cars 20 years ago.
Toyota studied German cars, but did not copy them.
Chinese on the other hand do replicate(copy) foreign cars shamelessly.
It’s disturbing that Chinese posters doesn’t understand the difference between reverse-engineering(functional equivalency, but not the same thing) and replication(producing knock-offs), and say Chinese replication is OK because Japanese and Koreans reverse-engineered.
But replication and reverse-engineering aren’t the same thing!!!
Hyundai copies Toyota and Honda like crazy! The Koreans also copied everything from China for centuries!
Which toyotas and hondas did they copy? Is BYD going to need to recall their cars since they copied Toyota so closely?
BYD will outsell the Hyundai sooner or later. You’re in denial if you think car companies don’t spy and copy one another to some degree.
I know they all copy. But they change things so they aren’t the exact same thing. BYD is copying and still making them at a lower quality even. It is possible they will be a huge car company someday but they will have to turn around their whole program to do it. Not saying it is impossible but it is a long ways from what they are doing now to accomplish that.
Hyundai worked with Mitsubishi for engines and multiple models. But that was licensing, not copying. I don’t see any Toyota’s or Honda’s in the line-up though.
@ China #1
> Hyundai copies Toyota and Honda like crazy!
Says who? You?
> The Koreans also copied everything from China for centuries!
Korean culture looks nothing like Chinese culture. Chinese solution doesn’t work in Korea.
Toyota and Hyundai, and tons of other auto makers started by copying, whether you like it or not, I “LOVE” China. Hyundai copied Toyota.
@Head Honcho, BYD changes things too, duh. BYD is going to overtake Hyundai, and it has it’s advantages in future vehicles.
What advantages do they have? You can’t innovate when you are making copies. It just isn’t in BYD engineers minds to create something better if they are just copying. No free will obviously if they copy a toyota and it looks just as ugly as a toyota.
It seems that Koreans are saying that now Confucius is Korean. The video below also explains that Korea is claiming Chinese characters, Chinese medicine, Chinese literature all originate in Korea. Basically what this means is that if the Korean submission to UNESCO succeeds, Chinese medicine will become Korean medicine, and so on.
Keep in mind, Koreans also say Samurai, Judo, Karate, Kendo, Sushi, Cherry blossoms, and virtually anything else distinctive of Japan (including the Japanese royalty) originate in Korea. Korea should promote their own culture overseas, not misappropriate the culture of other peoples and label it ‘Korean’.
Ed it is quite obvious BYD changes things. Lets just hope they turn that around and make changes for the better in the future and not just cost cutting at the expense of safety and performance.
I have to love how some of you are claiming Hyundai copies cars also. Please point out which model is a copy of something. Are you talking about a copied cigarette lighter or you can see the car looks just like another model like BYD does?
I’m talking about technology, not design, and BYD is one of the most innovative companies and they are the leader in Hybrid/Electric vehicles. You obviously don’t know anything about BYD or the Chinese car industry, you are talking as if you were blind and have no idea about what’s going on.
Koreans claim everything is their own, which is quite pathetic, which is also why I don’t believe I “love” China. Confucius, The Great Wall of CHINA, Chinese, and Mengzi are obviously CHINESE, not Korean. They are not going to get anything good unless they invented/made something as spectacular. You might as well give up your claims that Hyundai is the mightiest, Ssangyong is related to everything, and that everything’s connected to Korea etc.
The Chinese should boycott anything Korean because they do steal Chinese culture and attempt to pass it off as Korean culture at the UN.
You should be happy they think so highly of Chinese culture that they want it for their own then.
@ Kimchi_Stinks
> It seems that Koreans are saying that now Confucius is Korean.
Absolutely not; It is the work of Chinese fiction writers known as “news reporters”. It has gotten so bad that Chinese embassay in Korea is asking Chinese media to stop running those ficticious stories.
> The video below also explains that Korea is claiming Chinese characters
Certain characters are indeed of Korean origin. House is a well-known example.
> Chinese medicine
They are not Chinese medicine. What was registered at UNESCO was a volume of comprehensive encylopedia of Korean medicine, which uses locally sourced herbs and locally developed treatment technique to treat illness. It is not related to Chinese medicine at all. What was registered was the encylopedia of Korean medicine produced by Korean doctors.
> Chinese literature all originate in Korea.
How could Chinese literature originate in Korea? They are Chinese as the name indicates.
> Basically what this means is that if the Korean submission to UNESCO succeeds, Chinese medicine will become Korean medicine, and so on.
You do not understand what was registered was a Korean produced encylopedia of medicine, the drama on the said doctor’s life being already aired in HK and China. Chinese are always free to register Chinese encylopedia of medicine and they should.
> Keep in mind, Koreans also say Samurai, Judo, Karate, Kendo, Sushi, Cherry blossoms, and virtually anything else distinctive of Japan (including the Japanese royalty) originate in Korea.
Of course not. I am surprised you actually believe in things like that. But there is the Great Firewall of China on Internet so that external information doesn’t flow into China freely…
As for that Japanese emperor thing, you have DPJ party boss Ozawa Ichiro getting blasted by Japanese rightwingers for his “The Emperor is a Korean immigrant” comment during his lecture, but it is actually well-known stuff in Japan and Japanese don’t like to discuss this in public.
> Korea should promote their own culture overseas
They do, why bother promoting Chinese culture at tax payer’s expense?
@ Ed
> I’m talking about technology, not design, and BYD is one of the most innovative companies
The most innovative company that happens to be the king of auto piracy.
> and they are the leader in Hybrid/Electric vehicles. You obviously don’t know anything about BYD or the Chinese car industry
Actually BYD is discussed extensively within American EV enhausist circle, and the current consensus is that it is all smoke and mirror, no substance.
And of course all the posters here do know about Chinese car industry.
@ BYD Fanboy
> The Chinese should boycott anything Korean because they do steal Chinese culture and attempt to pass it off as Korean culture at the UN.
Those people sitting at UNESCO panel are Ph’D holding cultural history experts. They surely know things more than you and I here. If they say what average Chinese commonly believe to be true is actually false, then they are right and you are wrong.
@HH You should be happy that BYD is so fond of Toyota’s designs that it gets it’s inspirations from them.
Why? I don’t like toyota and I can’t respect anyone that does something half ass.
and I don’t like Koreans who try to pass off others culture/things as their own.
Just like most people don’t like Chinese brands trying to pass off a product as their own when they copied it. Not much difference there.
Wow. That’s all I can say. Are you mental(ly challenged)?
Smart. BYD.
Short term making a profit smart, yes. Long term making a profit smart, NO!
Cutting costs, smart. Using manpower, smart. Battery technology, smart. Long term smart, yes. Long term making a profit, yes.
Ed you are a yes man. I haven’t met a supplier yet in China that had told me no. I can respect a company that can say we can’t do something. I can’t respect a person or company that says yes to everything and can’t pull it off. In China you are usually better off leaving the YES companies and looking for a new supplier.
Right, a company that can’t do anything should totally be respected. It’s okay if you don’t have a lot of power, but you should at least have the ambition, and the ability to dream. There wouldn’t be a Microsoft, Lenovo, or Toshiba if they all said no.
They do say no. They say no to the products they create that are total junk and never make it to market. BYD lets everything they create go to market. That is the difference.
and you would know because you work for BYD?
Did you read the article? Have you driven one of their cars?
The article does not say that their cars are junk, and yes, I have driven their cars, I prefer them over American cars any day.
Obviously you can’t drive then and have no right to make comments about any cars.
I’m pretty sure I can drive, better than you too. Suck it up, didn’t know American cars were the real trash? Well, now you know.
and whoa slow down there, you are saying that people who can’t drive can’t make comments on cars? Was that discrimination right there? Be careful about what you say, there are plenty of people who can’t drive but can still beat you up perfectly. Just a warning.
No I was just saying you shouldn’t make comments because it is obvious you can’t drive by the cars you are choosing as great cars. Is that last part a threat? Get real. You really are 14 years old aren’t you. You should have realized already that you can’t threaten someone over the internet. I don’t need a warning. I am not stupid enough to believe anything you say. No one in here is stupid enough to believe anything you say.
So discrimination over the internet is allowed? and no it wasn’t a threat, like I said, it’s a warning for your own good. I’m not stupid enough to threaten others over the internet where everyone can see. But apparently you don’t care about what you say and how people will perceive it. I don’t think you should make comments since you obviously don’t know anything about Chinese cars.
Ed you know nothing about cars or business even in China. Yes you did make threats and no I don’t care because it isn’t possible to be threatened by someone named Ed that doesn’t know anything about what he talks about. Yeah discrimmination shouldn’t be allowed so you shouldn’t be on. I don’t discrimminate against anyone except you because you have proven you have little knowledge about anything even in your own country. Everyone else on here from China talks with some sense except you. So good luck with your made up world. I am done responding to your nonsense. I am going to give you one huge tip. Look both ways before you cross the street. Cars don’t always stop for people in China. Good luck.
we are about to begin importing BYD in here…
Every car company started out copying someone else’s product. And every major car company still buys other cars to check them out.
Didn’t know they did so much by hand though. That can’t last. They’re gonna have serious problems with that in the future. I they don’t start automating soon they’ll be too late.
That isn’t quite correct. Not every car company started by copying others cars. Look back at the first car companies like Ford and it just wasn’t possible. American car companies have had a very long time to fall but you can’t look at them and say they copied everything to get to the stop at the start. They had creative teams of engineers to get there. Not something you see in China yet. Imported engineers are what is giving a few Chinese brand cars their creative edge.
Again, it’s a wonder that you can’t see. Chinese companies ARE creative.
@ Ed
> Chinese companies ARE creative.
This is a statement disputed by non-Chinese outside of China.
The stereotype that “China == Poor-quality Copy” is so strong outside of China that it will take a generation of entirely innovative product to break that stereotype.
I mean, you have even Africans holding “China == Poor-quality Copy” stereotype.
Ed you are right Chinese car companies are pretty creative. They manage to put suspension in cars originally designed for a totally different car and weight size creating something that drives like crap. It is quite amazing all the parts they can engineer to fit together from different models so they don’t have to make or design any new parts. Most companies end up giving up and making new cars instead of putting old ones together.
Just like Toyota. Again, you would know how?
you all debating like byd is the first chinese who copy. Almost all chinese are copying and not only in car industry but in all sectors. For exemple italians dont want them at their furniture sector fairs because they are like photncopy machines. Personaly i believe that copys make live longer the originals
Yeah, and the whole world copies from each other, otherwise, there would be little advance.
Say the fenqing loser..Making excuses for a loser company. Bwahahahhaha
Ed your reasoning makes no sense. How is copying advancing anything? Being creative and innovative is making advances. Copying can only bring the price down on items or devalue them.
Where did creativity come from? If the world didn’t copy eachother’s products, the how did we get so many companies competing in the same category? How did so many different cars get equipped with the same technology? How did the rest of the world get paper, gunpowder, and the compass? Where would the world be without copying?
Technology spreading to the world isn’t copying if it is sold or licensed by someone. Go back to paper and compass and there weren’t any protection rights. So totally different story. Making a product for the same market that is similar isn’t copying either. My company is producing a product with a lot of competition and there is very little copying going on. Copying is when someone isn’t innovative or creative. Maybe you meant where would the world be without a copying machine?
He is a Fenqing loser..Forget it Head Honcho, you are talking to a wall, a very stupid wall, so please don’t waste your time.
@ Ed
> If the world didn’t copy eachother’s products, the how did we get so many companies competing in the same category?
You can look at your competitor’s product, then go on to build yours from scratch. What Chinese is doing is cut&paste and xeroxing, not building your own product.
> How did the rest of the world get paper
Western maper is made differently from Chinese papers.
> gunpowder
Western gunpowder has different chemical composition.
Western paper and gunpower are the examples of westerners taking a look at Chinese product, then building their own versions, often improved from Chinese originals.
@ tomson
Exactly, Chinese individuals seem to have a problem distinguishing the difference between examining a competitor’s product to build your own to actually producing a replica of competitor’s product.
and what’s your definition of creativity? Creating products that all look and function the same? I would define that as copying. The Chinese are copying no more than the rest of the world. It doesn’t matter if there is a trademark, registration or not, someone invents something, you follow in their footsteps, copying.
You are so lost. Did you even graduate from high school?
@ Ed
> The Chinese are copying no more than the rest of the world.
The rest of world strongly disagrees with this statement.
> someone invents something, you follow in their footsteps, copying.
You are not supposed to copy, you do your own version. Why is it such a hard concept to understand for Chinese?
@ Head Honcho
No, he is representative of typical Chinese. Chinese keep copying because they don’t understand what they are doing is wrong.
I don’t like to stereotype. Not everyone in China is like that and many Chinese are just as frustrated as we are with the attitude.
Imitate – to copy or reproduce closely
Plagiarize – to use and pass off the words/writings of another as one’s own.
SO…….we have Mr. Wang freely adimtting that BYD imitates, but does not plagarize. It would seem to me that this is all Toyota needs to present legal action againist BYD – not to necessarily stop making the F3/F0/G3/etc., but to pay Toyota a fee for it’s designs that BYD has already admitted it imitates. These ARE great articles, and gives a bit more insight into the thinking of BYD. Now…..if BYD refuses to pay Toyota anything, does this constitute plagiarism? Actually, no………because BYD isn’t trying to pass off Toyota’s designs as their own (or saying that outright), it would just be a refusal of payment for the use of another company’s IP. That’s still illegal, but a different case than outright plagiarism. This could be a VERY interesting legal case……..if it ever goes to court – which I doubt.
@ joninchina
> to pay Toyota a fee for it’s designs that BYD has already admitted it imitates.
This doesn’t work, since no company would grant license to a competitor in the market they are already present in, like China.
License-production is only for a specific market where the licensor is not present, and certainly not for export.
Contrary to Chinese myth, Korean automakers did not copy anything; they outsourced designing process they could not handle themselves in the beginning, and this is why there were no legal disputes associated with first Hyundais when they came to America back in 1985 since they were fully legal.
Now good luck with BYD trying to ship F3 and F0 to USA, because Toyota lawyers would be waiting at the port with a seize order in their hands.
“Korean automakers did not copy anything;”
Right…
Hyundai copied Toyota and Mercedes in an attempt to build better cars.
There is a fine line between copying and research off a competitors product. BYD obviously is going straight to copying since their produces look like the cars they took apart. What Hyundai cars look just like a toyota or mercedes?
Yes Hyundai’s cars did. Just as much as BYD.
Ed this is annoying that you really are just making claims all over. Back something up. You are making this crap all up.
He won’t because he is a Fenqing loser that likes to cry.
You can read all about these loser..He is probably a virgin, that jerk off to this loser company(build Your Dreamcrap).
http://granitestudio.org/2009/03/15/lonely-boys-and-losers-are-we-overstating-the-fenqing-phenomenon/
@ Ed
> Yes Hyundai’s cars did. Just as much as BYD.
Examples please? Why were Americans and Europeans so silent on the arrival of “copied” Korean cars when they are buzzing about “copied” Chinese cars that haven’t even arrived to their soil???
The western countries were not silent about Korean cars, they thought of them as crap. An example of an inspired Hyundai design would be found here http://fandcorp.wordpress.com/2009/09/27/hyundai-sonata-yf-a-copy-of-the-mercedes-cls/ and here http://fandcorp.wordpress.com/2009/09/27/hyundai-sonata-yf-a-copy-of-the-mercedes-cls/ (Headlights, Camry + Chang’an, Rear, Corolla.)
@ Ed
> The western countries were not silent about Korean cars, they thought of them as crap.
Yes, they were crap, but not copies.
Chinese cars of today on the other hand are crap copies.
> An example of an inspired Hyundai design would be found here
That’s the opinion of one man. One man’s blog acclaiming BYD’s models as innovative doesn’t make BYDs innovative. You don’t see mainstream press accusing Hyundai of copying other makers. They call them “inspired by” but not “copied”.
One man claiming BYD is a copycat does not make them one. The Chinese are in a better situation than when the Koreans or Japs first started.
BYD admitted they copied. Did you even read the article? I am starting to wonder if you are even Chinese. I am guessing you are from another country and are just trying to get people going.
CCT you should be able to tell what country he is posting from. Come on.
I can, but its not my business to say.
Did YOU read the article? How stupid can you be?? They admit that they reverse engineered, which is totally different from copying. Stop living in denial, the facts are there.
I can only confirm, article is nice to read, but…is not nice to drive BYD’s.
During my stay in South China I bought BYD F0.
Here are my remarks:
1. Cost savings everywhere-car is missing some fundamental items.
2. Material used is very cheap and manufacturing quality is very rough and simple.
3. After few weeks, half of stuff inside of car is not working anymore.
My conclusion is: BYD is on manufacturing level of scooters and motorbikes.
Though, I have one positive characteristics for BYD: very good and fast service.
Bye, bye BYD…never again!
Like I said, Build Your Dreamcrap..
tomsoncrap
Here come ed, the Fenqing loser, is that your slave name? ..go cry to your mommy boy.
Get your Chinese right first. You can start by learning proper characters instead of first grade pinyin.
LOL the Fenqing loser, can’t respond to my comment but made up some crap of my writing. My spelling is fine loser…Go cry to your mommy.
As if there were anything worth responding to?! LMAO. by the way, pinyin is not equal to spelling. GO redo kindergarten again.
BYD is a copy cat and it will continue to do so since it is just a new player. Chery and Great Wall on the other hand or moving out of their copy cat state and going into developing cars on their own.
Who did BYD copy the E6 from? BYD are imitators and innovators, as are many Asian companies. The Koreans copied the Japanese (and still do), and the Japanese copied the Americans and Europeans for decades (and still do).
Their success has been on imitation so far. You are talking about an unreleased totally unproven car with the E6. Not seeing any Japanese copied Euro cars currently. They have all their own style pretty much. I haven’t ever mistaken a Korean car for a Japanese model either. Kia and Hyundai cars are pretty easily to spot as a Kia or Hyundai.
Not seeing Chinese companies copying when they have got almost 100 years of history. OF COURSE the Japs aren’t copying the Chinese and Europeans NOW. But they did when they first started.
You have proof of this and you were there? Are you even old enough to drive yet?
Pretty sure the Japanese never copied the Chinese when they started making cars. That statement doesn’t even make sense.
It’s not just cars, and the Japs copied from Western countries when they first started. Learn some history.
Ed you don’t know anything about Japanese. You have already proved it. You don’t even know how business happens in your own country. You should work your way up a company and try to larn something. Maybe you should go work for BYD. They will probably let you copy any car you want.
learn. Stick e key.
“larn” to buy a keyboard that’s not a piece of crap first. As if you know Asians better than me. I’ve lived my whole life in China, which is a lot more than your mere 7 years.
Sorry but im on a Dell that was made in China.
You have lived there your whole life but don’t even understand how things work there. I think maybe it is time for you to move to a new land where everything is as nice and perfect as you imagine it is in China. In general i feel a connection with most Chinese people I know and have met. With you around I would just feel embarrassed to hear you protect all the companies that just copy and do things wrong. Yeah you have some profits and a little success in China and sales in third world countries but that is it running that way. I hope you aren’t planning any long term stock investments.
Oh yeah, Dells really suck, just like all American PCs. I would agree.
However, my Chinese-made Lenovo and my friend’s Chinese-made Asus never had that problem, so I guess it’s only crappy American machines. Do you know who I am? What I do for a living? Or even where I am?! How can you back up your BS? I can jump around angry faced and yell “American companies copy and do all thins wrong” all day long. Anyone can do that, but where is your evidence??!!
Found a few interesting tidbits….
Honda started making cars on their own using experience they learned building motorcycles as did Subaru (with an engine sourced from Peugeot).
Toyota spent the first 15 years of it’s existence copying other designs…. note, there was a war going on for 6 of those years….. http://en.wikipedia.org/wiki/Toyota_AA . After the war they began to develop their own models, guess these things take time.
Nissan and Mitsubishi survived mostly by making other companies products until they developed their own.
Hyundai spent the first 7 years producing the mighty Ford Cortina before releasing the Pony which used some Cortina parts (most likely under license). http://en.wikipedia.org/wiki/Hyundai_Motor_Company and http://en.wikipedia.org/wiki/Hyundai_Pony
Not much on Kia but they got a big boost in the 80′s making Fords and Mazdas.
Daewoo was itself an insignificant car company that only survived because it had JVs with Nissan then Toyota then GM. After the GM JV ended they spent the next few years going bankrupt before GM bought them out with help from Suzuki and SAIC.
Now, I’m in no way defending BYD (or any other clone companies, chinese or not) in the way they do things but they have to start somewhere and this is the way they are doing it even if its not “normal” in our eyes. We can rant and rave and throw our toys out of the sandpit but really what else can we do?.
Before ANY auto company can sell vehicles in the US or Euro markets they will have to meet the safety and emission standards. When that time comes some will be miles ahead with some others not far behind. BYD and the other cloners will then learn that cheap labour and borrowed designs doesn’t equal instant success.
Phew, long post…. 我会喝啤酒.
@ woxihuanpijiu
> Toyota spent the first 15 years of it’s existence copying other designs….
That’s during the era of Imperial Japan, when the Japanese ethics code was totally different from it is today.
> After the war they began to develop their own models, guess these things take time.
No, you can thank Americans for this.
> Hyundai spent the first 7 years producing the mighty Ford Cortina
Under license, of course. Actually it was a CKD supplied by Ford Europe.
> before releasing the Pony which used some Cortina parts (most likely under license).
Pony was a Mitsubishi. Mitsubishi signed a technical assistance with Hyundai where it would engineer Hyundai brand cars for the engineering cost + 5% running royalty, and Hyundai was free to export these anywhere, even to Japan. This relationship lasted until 1998 when Hyundai Equus/Mitsubishi Dynasty was the last auto joint project between two.
Legacy of this relationship exists today and Mitsubishi four banger is still based on Hyundai engine designs, as Mitsubish ran into financial difficulties in the early 2000s with the massive recall scandal and lacked funding to develop all new four-banger engines. Hyundai’s four banger design was most familiar to Mitsubishi engineers for the obvious reasons, so Mitsubishi licensed Hyundai’s Theta engine series.
> Not much on Kia but they got a big boost in the 80’s making Fords and Mazdas.
Kia was partially owned Ford, which also partially owned Mazda. This is why Ford arranged to have Mazda designs produced by Kia, until Kia started to come up with its own designs in the early 90s. Once again, Kia’s models were fully legal during all stages of Kia’s growth and they were in fact for sale in the US, rebadged as Ford.
> Daewoo was itself an insignificant car company
Daewoo at its peak was bigger than SAIC of today.
> After the GM JV ended they spent the next few years going bankrupt
Daewoo started developing its own models once GM pulled out due to JV control disputes, and Daewoo in fact sold its cars in the US for a couple of years. Once again, All Daewoo models were fully legal from the beginning to the end.
> but they have to start somewhere
That somewhere doesn’t have to be piracy, as demonstrated by Koreans who were fully legal from beginning.
> Before ANY auto company can sell vehicles in the US or Euro markets they will have to meet the safety and emission standards.
Meeting US and Euro safety, emissions, and now fuel-economy standard raises cost, and any Chinese automaker attempted to do so will be priced out of Chinese domestic market.
For Japanese and Korean automakers, their primary market is the US and European markets. Accordingly, their cars are engineered to be US and Euro regulation compliant.
For Chinese automakers, their primary market is Chinese domestic market. Accordingly, their cars are engineered to be Chinese regulation compliant. Making them US and Euro regulation compliant would make cars too expensive for Chinese domestic market.
I never said Hyundai and Daewoo copied others, just Toyota which is pretty common knowledge. Eiji Toyoda visited Fords plants in the early 50′s and discovered how not to do things (in his mind anyway) and went from there and did pretty well although it still took almost 18 years for some success in the US marketplace. The Americans helped Japan/Germany/England and others rebuild after the war…. They have even helped South Korea during their 60 year war with the North.
Kia was making cars before the JV (JV is part ownership last time I looked) with Ford/Mazda and would have been under the umbrella if Hyundai didn’t outbid them.
Other quotes from Wikipedia, if you want to dispute them then show some facts and change the wiki page. Other pages say similar things too….
Pony,
When Hyundai wanted to develop their own car, they hired George Turnbull, the former Managing Director at British Leyland. With his experience with the Morris Marina (see Korean connection), engines and transmissions from Mitsubishi, some parts from the Ford Cortina they were already producing, and a hatchback body styled by Italdesign Giugiaro, they developed the Hyundai Pony.
On Hyundai in the USA
The Excel, although initially well received, gave Hyundai a bad image, as over time its faults became apparent. Also, in efforts to bring the costs down, its quality and reliability suffered. As time caught up with the poor reputation of Hyundai in the United States, sales dropped drastically, and car dealerships started abandoning their franchises.
Rather than drop out of the world’s largest automotive market, Hyundai began investing heavily in the quality, design, manufacturing, and long-term research of its vehicles in 1998, and added a ten-year or 100,000 mile warranty to its vehicles in the United States. This effort paid dividends for Hyundai, and in 2004 the company tied with Honda for initial brand quality, second in the industry behind Toyota, in a survey conducted by J.D. Power and Associates.
Daewoo (group, no real info on the car side only). Some of the group still exists.
By 1999, Daewoo, the second largest conglomerate in South Korea with interests in about 100 countries, went bankrupt, with debts of about 80 billion won ($84.3 million).
Soon after the demise, Chairman Kim Woo-Choong fled to France, and former Daewoo factory workers put up “Wanted” posters with his picture. Kim returned to Korea in June 2005 and was promptly arrested, after spending six years abroad. Kim was charged with masterminding accounting fraud worth 41 trillion won ($43.4 billion), illegally borrowing 9.8 trillion won ($10.3 billion) and smuggling $3.2 billion out of the country, according to South Korea’s Yonhap News Agency.[3] On 30 May 2006, Kim was sentenced to 10 years in prison after being convicted of fraud and embezzlement. On the last day of the trial, Kim tearfully addressed the court, “I cannot dodge my responsibility of wrongly buttoning up the final button of fate.”
Basically (to me anyway) that says the Hyundai asked for help and used it wisely which is what some of the Chinese manufacturers are doing. Some will succeed, some will fail although not likely as bad as Daewoo because the Chinese government is actively trying to grow the sector by pumping in heaps of cash and by putting the squeeze on emissions slowly to allow healthy growth. the government still has it’s hand in the pie in some way so it isn’t going to let things stall in a hurry.
Hyundai had problems similar to what the Chinese have (yes, without blatant copying) but they realised that things have to change and are better now because of it.
Chinese consumers are a bit naive and immature sometimes about things like pollution but they are learning. Price is still more important in their minds and the clone makers are filling that gap because the bigger manufacturers are not wanting to get involved in an all out price war which could hurt reputations and profits. Being in a JV is more expensive to being with but the rewards are worth it more in the long run for both parties involved if the relationship is right. SAIC is a good example of that and will grow as a company even if not so much as a brand.
@ woxihuanpijiu
> just Toyota which is pretty common knowledge.
That was before the destruction of Japanese Empire and the Martial Law imposed by US occupation forces. US tried to impose its values onto Japanese to the best of its ability during the occupation, so post-war Japan has a drastically different view on what is acceptable compared to pre-War Japan.
> Basically (to me anyway) that says the Hyundai asked for help and used it wisely which is what some of the Chinese manufacturers are doing.
Those “some of the Chinese manufacturers” do not include BYD.
> Hyundai had problems similar to what the Chinese have (yes, without blatant copying) but they realized that things have to change and are better now because of it.
The difference between Hyundai(or any other Korean automaker) and Chinese automakers is that that the domestic market wasn’t the biggest or even the most important market for them, as these companies generated 80~90% of their sales overseas and all their cars are engineered to comply with US and Euro regulations from the start, because they must export to survive.
For Chinese automakers, Chinese domestic market is their most important market. Now, tell me how many indigenous brand car models released in China are designed to comply with the US and Euro regulations from the start? It is a very different mind set that governs Japanese/Korean automakers and Chinese automakers, where the mind set of Chinese automakers is actually similar to US automakers of 1930s, not Japanese and Korean automakers of 1960s and 1980s. So what does that tell you? China will be the single largest auto market in the world like the US auto market, but China will not become a great automobile export power like Japan and Korea before them.
The very elements that made Japanese and Korean automakers world-beaters are not present in Chinese indigenous automakers of today. If you can’t see that, oh well….
USA : Domestic market centric
China : Domestic market centric
vs
Japan : Export centric
Korea : Export centric
Still no links to back up your theories?
No one claiming Korean car companies copied cars like Chinese when they started has backed anything up what so ever. Everyone knows that they were exporting very early so they would have had to met all international standards from the start. Something the Chinese automakers don’t seem to care as much about since the Chinese market is so easy to sell in right now.
@ Head Honcho
There is a legal way to build cars in China, but Chinese automakers don’t want to do it because “Doing the legal way” costs money and they are cash-short.
Beside, engineering a car to US and European regulation compliance is a financial suicide in China, when all the other guys are cheapening their models to compete in the price war. Heck, even the foreign brand models are stripped down to cut cost for Chinese domestic market.
In other word, Chinese automakers are caught in a vicious cycle; do it the legal way and be driven out from the biggest auto market in the world(Chinese home market), or cater to Chinese home market by building the cheapest knock off of somebody else’s car and give up going to the US and Europe.
It is not possible to have both, so almost all Chinese makers are giving up on US/Euro markets to stay at home.
Japanese and Koreans didn’t have this problem since everyone was exporting and had to be US and Euro regulation compliant, even if that raised price of cars in their respective domestic markets.
The China market it just too easy now. It will change though. Just like in other countries do you buy the cheapest car knowing it isn’t that great or do you buy a used car a couple years old that you know will last longer than that brand new cheap car. The used car market is too new in China so it will be a few years before that cheap cars take a hit when people realize they can get a better car for the same money but it isn’t brand new.
Roewe’s quality is top 5! Don’t put all Chinese car companies in the same basket buddy!
http://www.chinacartimes.com/2009/08/29/roewe-beats-bmw-in-2009-jd-power-customer-service-index-study/
Roewe is a step up from the others but it really isn’t a home designed Chinese car. They have the right idea though. Nothing wrong with that approach at all either. Every international car brand has used some help from other brands in other countries at some point.
Well done guys, CCT topped 100GB by Feb 15th and will probably hit 200gb+ in bandwidth by Feb 28th. I think the majority of traffic is to this thread.