Wang Chuanfu: BYD will treat problems seriously when there is heavy pressure

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Wang Chuanfu, president of BYD, admitted at a recent media conference that they made some strategic mistakes in the previous years, such as ignorance of product quality, and will see 2011-2012 as the adjustment period. He also said that the company’s growth slowdown in the recent two years is not a bad thing, and it forced them to make real efforts on solving noise problem, windshield wiper problem, dealer problem, sales network problem, and media advertising problem.

The adjustment will start from sales network. They had more than 1,000 outlets before, and now the number has reduced to above 830.

Wang also admitted that they were wrong before when they had few contacts with public media, and they should share their thoughts with the media friends frequently and let other people know more about BYD.

As to the sales staff, Wang said that the number of their sales staff will be controlled at about 2,500, and they are cutting the number of sales networks from four to three. In principle, they won’t recruit new staff for neither the sales operation nor the BYD headquarters. But they will recruit some technical experts each year.

He also mentioned about the resignation of Xia Zhibing, former general manager of BYD Sales Company, saying that he wanted to leave himself, and the mistakes were made by the whole company, but not just Xia Zhibing himself.

In terms of corporate management, they will train many talents who know both technologies and management well. Wang is usually the top authority in the management of the company’s battery business, but he will listen to others’ opinions in the management of other businesses.

The company aims to improve the quality of all of its products this year, so as to meet the standard of JV auto brands. The IQS will be kept within 10%. Now S6 and F0 have been able to meet the standard, and they will focus on F3 this year. The most frequently complained part of F3 is its windshield wiper, and BYD plans to choose Bosch as its supplier to reduce the complaint rate. Since they are making a large number of products, they can bargain with suppliers about prices. Centralized purchase of parts of famous brands can ensure both product quality and low costs. Now the company’s gross profit margin for the automotive business is around 15%.

As the company is not competent in the engineering of many aspects, such as chassis technology, test, noise control, and rear lamp styling, BYD cooperates with many foreign partners in this respect.

Wang said that they were basically a learner in the automotive industry in 2003-2005, and they didn’t dare to make some unique-looking models, because these cars might not sell well, while some plain-looking cars like F3 can be well received and have no investment risk.

He also talked about the electric vehicles. The second half of 2011 marks BYD’s starting massive production of electric vehicles, including 200 electric buses. They will produce 2,000 electric buses next year.