BYD has been around for a while with reasonable success but its sales have recently surged. Most of its deliveries are in China but is aiming for half its sales to come from outside of China by 2030. Considering it sold 4 million cars in China in 2024 and may increase this figure by 2030, that is a challenging target. It's in a hurry.
I wrote about recent sales for 2023-24 and Q1 2025 which can be seen by clicking on the dates. I was impressed about the progress BYD was making.
A leaked e-mail in late 2024 showed BYD asked suppliers for a 10% reduction in prices which sounded arbitrary to say the least. Once prices are negotiated, they should be honoured until the next round of negotiations. BYD responded at the time by saying the price cut wasn't mandatory. Still, it set off an alarm bell for me.
Now comes confirmation of something far darker. BYD decided to build its first plant outside of China in Brazil. However, work was stopped there late last year. Now The Public Labour Prosecutor's Office in the state of Bahia says 220 Chinese workers were rescued and is suing BYD and two of its contractors. Why? They said the standard of accommodation, work hours and some issues around workers rights were unacceptable.
One would like to think this was an exception but we don't know. I mentioned earlier that the company seems in a hurry. That always concerns me as a hasty desire for success should never be at the expense of human rights. I know that sounds idealistic in this world where abuses in this regard are not uncommon. But having a major work construction closed down is serious and hopefully lessons are being learned.
Whoever is responsible for this situation will be held accountable and I don't know who knew what. But either way BYD is ultimately responsible as they must make sure nothing like this happens in any of their operations. Would I buy a BYD? Not for now at least. They need to make sure they are building dreams responsibly.
Photo source: BYD NZ.
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ReplyDeleteFor the record, BYD's factory construction in Hungary started in 2023, and is progressing so well that production is scheduled to start this year. This is a complete green field investment, as there is not much tradition in car manufacturing.
By comparison, BMW announced its Hungarian factory in the northeast (Debrecen) before COVID (in 2018), and production is starting about now.
IMHO BYD is now in the stage like the Japanese in the late 70s. They had already some experience and learned from past mistakes but still very eager to prove themselves.
Yet they are far from being allowed to live from their names.
They need to learn that human rights abuses, if proven, will tarnish their reputation and rightfully so.
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