J.P. Morgan pointed out that BYD's profitability in overseas markets will be higher than at home. Wang Chuanfu emphasized the importance of using artificial intelligence to improve the level of factory automation, especially overseas factories, in order to save labor costs, which is a major positive factor in improving BYD's profitability.
Going overseas is one of the highlights of BYD's 2023 performance. Currently, BYD Auto has spread to more than 70 countries, regions, and more than 400 cities around the world, and BYD has begun investing in construction of factories in Brazil, Thailand, Hungary and other overseas regions.
On March 29, a team led by J.P. Morgan analyst Lai Yizhe released a report stating that recently, BYD Chairman Wang Chuanfu and senior management jointly conducted a performance roadshow. The management set a target of 10 million for BYD's long-term global sales volume, half of which is overseas. From the second half of 2024 to 2026, BYD's overseas production capacity will begin to climb.The total production capacity at the initial stage is70-8010,000 vehicles.
Financial reports show that in 2023, BYD's overseas revenue reached 160.222 billion yuan, up 75.2% year on year. Overseas revenue accounted for 26.6% of total revenue, an increase of 5.03 percentage points over the same period in 2022. In 2023, BYD exported 242,000 passenger cars, an increase of 334% over the previous year.
J.P. Morgan Chase pointed out in the report that BYD's strategy is to focus on markets without local brands, such as ASEAN, Latin America, the Middle East and Africa, while seeking opportunities to enter some EU countries.The company's overseas profitability will still be higher than at home.
Overseas business has entered an accelerated mode
Wall Street saw this earlier. Since BYD made a high-profile statement in 2021 to expand its overseas market footprint, overseas business has entered a period of accelerated growth.
BYD's overseas market expansion has a clear strategic plan: on the one hand, it continues to expand the number of export countries, and on the other hand, it is committed to improving its product matrix. At present, BYD has deployed over 400 cities in more than 70 countries and regions on six continents around the world.
In terms of product matrix, BYD currently exports a relatively single product line, mainly focusing on the Dynasty series models. In order to gain more share and influence in the global market, BYD plans to expand overseas markets for different user groups by launching various brands such as Tense, Equation, and Yangwang.
Looking at the level of export volume, in 2023, BYD's export volume reached 243,000 vehicles, an increase of 337% over the previous year. Overseas sales growth not only far exceeded BYD's domestic sales growth rate (61%), but also surpassed the overall domestic electric vehicle export growth rate (80.9%).
This also enabled BYD's overseas business revenue to reach 160.22 billion yuan in 2023, an increase of 75.2% over the previous year, far higher than the domestic business's 32.9% growth rate; at the same time, the revenue share also increased by 5 percentage points to 26.6%.
As the domestic NEV market share ceiling approaches, overseas markets are expected to be the key to continued growth in BYD's sales and profits.
J.P. Morgan Chase pointed out in the report that in this roadshow, Wang Chuanfu emphasized the use of artificial intelligenceThe importance of a high level of factory automation, especially overseas factories, in order to save labor costs, which is a major factor in improving BYD's profitabilityA favorable factor.