Marketing Strategy of BYD Auto Co., Ltd

International Marketing Report

Author’s Name

The Institutional Affiliation

Course Number and Name

Instructor Name

Assignment Due Date

Table of Contents

Section 1. 4

a)    Introduction. 4

b)   Brief Introduction of Global Region for BYD.. 4

c)    Rough Market Screening. 6

d)   Market Ranking Process. 7

e)    Fine Market Screening. 8

Hofstede’s Cultural Analysis. 8

Market Selection. 9

Approach to Market Segmentation. 9

Target Market Segmentation. 10

Competitive Analysis. 12

Section B.. 14

a)    Introduction. 14

b)   SWOT Analysis and International Marketing Objectives. 14

c)    International Entry Mode. 16

Joint Ventures. 16

Wholly Owned Subsidiaries. 16

d)   Target Market and Positioning in New Market 17

Positioning and Distribution. 17

e)    Marketing Mix and Competitive Advantage. 18

Product Mix. 18

Pricing Mix. 19

Placing Mix. 19

Promotional Mix. 20

SOSTAC Framework and Competitive Advantage. 21

f)    Recommendations and Conclusion. 22

References. 24

Section 1

* Introduction

A forerunner in the electric car market, BYD Auto Co., Ltd. is a wholly-owned subsidiary of the IT behemoth BYD. BYD, founded in February 1995, has grown dramatically to over 30 industrial parks on six continents. The company prioritizes environmental sustainability and life quality through technology innovation (BYD, 2023). The market selection procedure for BYD Auto’s international growth is strategically summarised in Section A based on the theoretical framework, including PESTEL analysis, VALS framework, and segmentation. Besides, it comprises evaluating and rating nations according to a predetermined set of criteria, screening potential markets systematically, and conducting a thorough analysis to determine which market is best for entry.

* Brief Introduction of Global Region for BYD

India, Thailand, and Indonesia are three developing Asian EV markets with robust government backing, different levels of maturity, and underdeveloped infrastructure (Dioha et al., 2022). The five factors identified by the PESTLE study of the EV business in Southeast Asia are government backing, changing rules, financial incentives, and a population leaning towards environmentally friendly transportation. Urban infrastructure growth and technological developments are promising, but adaptation to climate change and infrastructure maintenance challenges remain, requiring companies such as BYD to design solutions tailored to individual regions.

Environmental Factor



Analysis and Trends in South East Asia



Political/Legal/Institutional Environments



Countries like Thailand and Indonesia have set ambitious government targets for EV adoption, with Thailand aiming to be an EV hub by 2030. Legal frameworks are being updated to attract foreign investment and establish supportive policies for EVs.



Regulatory Environment



Many South East Asian countries offer incentives such as tax exemptions and subsidies for EVs. Regulations are being considered for improved EV standards, including charging infrastructure and battery safety.



Economic Environment



The region's economic initiatives are increasingly focused on reducing dependence on imported fossil fuels and capitalizing on the growing EV market to boost local industries and employment.



Social and Cultural Environment



There is heightened awareness and acceptance of EVs in South East Asia urban areas, though varying across countries. Safety and environmental benefits are increasingly influencing consumer choices.



Demographic Environment



The region's young, rising middle-class demographic shows a growing interest in EVs, particularly inclined to two-wheelers and compact cars in denser urban areas.



Technological Environment



South East Asia is experiencing rapid digitalization and mobile connectivity growth, which supports integrating advanced technologies in EVs, such as remote diagnostics and telematics.



Natural Environment



The tropical climate poses challenges for EV battery performance. Regional EVs must be designed for high temperatures and humidity, which affect battery life and vehicle efficiency.



Physical Environment



Urban areas are increasingly investing in EV charging infrastructure, but rural areas lag. Companies like BYD can leverage this by partnering in infrastructure development projects.



Table SEQ Table \* ARABIC 1: PESTEL Analysis of the EV Market

* Rough Market Screening

Based on the market size analysis, the APM table below illustrates the emerging trend of EVs in the focused markets.

Country



Accessibility



Profitability



Market Size



India



Electric vehicle sales accounted for 1.3% of total car sales in 2022, but government targets indicate significant growth in infrastructure and market reach for various vehicle segments by 2030 (Popli & Cyrill, 2023).



The EV market value is expected to grow from US$2 billion in 2023 to US$7.09 billion by 2025, with industry estimates suggesting substantial profitability potential.



A projected 49% CAGR from 2022 to 2030 and an estimated 10 million annual sales by 2030 demonstrate a large and rapidly expanding market size.



Thailand



Thailand is ramping up to be a regional EV production hub by 2030, with plans for EVs to comprise 30% of vehicle sales. Foreign EV makers, primarily Chinese, have entered the market.



BYD's new factory in Rayong Province, producing 150,000 EVs annually from 2024, signals substantial investment and profitability prospects in Thailand’s EV sector (Phoonphongphiphat, 2023).



With aggressive goals for EV sales, Thailand’s market size is set to expand substantially, reflecting the government's commitment to making EVs 30% of vehicles sold by 2030.



Indonesia



The archipelagic nature poses unique challenges in accessibility; however, the country’s urbanization and infrastructure development are addressing these concerns.



With a CAGR of 20.9%, the market is expected to reach US$2 billion by 2029. Indonesia’s natural mineral resources bolster its profitability in the EV market (Bharadwaj, 2023)



The ambition to have 2.5 million EV users by 2025 and produce 1 million EVs by 2035 showcases a market with substantial size and growth ambition.



Table SEQ Table \* ARABIC 2: APM Table

* Market Ranking Process

The following table evaluates India, Thailand, and Indonesia for BYD Auto’s market entry choice based on the market ranking process factors and their relative importance. The market size, growth, ease of entry, and internal considerations for BYD Auto will all be considered. Hence, use the given scoring system (1 for terribly unattractive to 10 for incredibly appealing) and weights.

Criteria (Weight)



India (Score)



Thailand (Score)



Indonesia (Score)



Market Size (40%)



8 (3.2)



7 (2.8)



7 (2.8)



Market Growth (10%)



3 (0.3)



6 (0.6)



6 (0.6)



Ease of Market Entry (20%)



6 (1.2)



5 (1.0)



6 (1.2)



Internal Considerations (30%)



9 (2.7)



8 (2.4)



3 (0.9)



Total Score (100%)



25.4



22.8



23.5



Table SEQ Table \* ARABIC 3: Ranking Process Table for BYD

* Fine Market Screening

Hofstede’s Cultural Analysis

Comparing the Hofstede framework for the three countries, it was identified that India’s cultural environment offers a rich environment.

Figure SEQ Figure \* ARABIC 1: Hofstede’s Cultural Dimension Comparison (Hofstede, 2023)

Cultural Dimension



India



Power Distance



High



Individualism



Low



Masculinity



Medium



Uncertainty Avoidance



Medium



Long Term Orientation



High



Indulgence



High



Table SEQ Table \* ARABIC 4: Target Market for BYD

India’s high power distance fits well with BYD’s appreciation of authority and disciplined business practices. India’s collectivist culture, which resembles China’s community-oriented values and consumers’ propensity for indulgence and long-term thinking, recommends an open market for BYD’s innovative and sustainable EVs, as they will appreciate electric vehicles’ long-term benefits and advanced technology (Hofstede, 2023). In addition, the moderate level of masculinity recommends a recognition of success and accomplishment, consistent with BYD’s renowned reputation for producing top-notch, cutting-edge technology vehicles.

Market Selection

The thorough analysis confirms that India is the best country for BYD to expand in India. India presents a favorable environment for BYD’s innovative technologies due to its sizable and rapidly growing EV market, favorable government policies, and cultural unity. This deliberate concentration on India is expected to pay off handsomely and increase BYD’s global presence in the electric vehicle market.

Approach to Market Segmentation

The VALS method evaluates the recommended target market according to consumer behavior and concerns.

VALS Segment