Marketing Strategy for BYD Auto’s Expansion

Marketing

Student Name

Institutional Affiliation

Marketing

SECTION A

Introduction

This international marketing strategy seeks to identify the most suitable EV market in Asia for BYD Auto’s expansion. The recovery from the global pandemic has created a dynamic landscape, which offers BYD Auto an opportunity to make a significant impact in the Asia region. Through a systemic analysis, this report identifies and prioritizes Asian countries based on their potential for BYD Auto’s success.

Rough Market Screening

Country



Accessibility



Profitability



Market Size and Growth Potential



India



Moderate



High



High



Malaysia



Moderate



High



Moderate



Indonesia



Low



Moderate



High



Thailand



Moderate



Moderate



Moderate



Vietnam



Low



Moderate



Moderate



Singapore



High



Low



Low



Aaccessibility

The accessibility for India is high. The country has a vast geography, with growing infrastructural developments. This will ensure a vast network for charging the vehicles. However, accessibility in rural areas may be challenging, especially where there is no electricity, despite the efforts made in rural electrification (Aklin & Urpelainen, 2020). For the Malaysian market, the accessibility is moderate. The cultural similarities with China make it easier to penetrate the market. There is a lack of EV infrastructure in Malaysia, along with a strong dependency on fossil fuels (Veza et al., 2022). However, the government is also supporting the development of infrastructure, which is critical for supporting EVs. However, the competition in the EV market is high, which hinders accessibility. The Indonesian market is challenging to access. The distribution networks are poor. The infrastructure is underdeveloped, making it challenging for EVs to operate effectively (Veza et al., 2022). In Thailand, the cultural affinity to China makes accessibility moderate. The infrastructure is relatively good, which allowed the introduction of EVs. However, regulatory hurdles to EVs might make it challenging to access the market. For Vietnam, market accessibility is low. The country has an underdeveloped infrastructure and a complex regulatory environment, which might make penetration difficult. In Singapore, accessibility is high. Singapore has a well-developed infrastructure. The regulatory environment for EVs is good, due to the government support. However, competition in the EV market is stiff, which might make entry problematic.

Profitability

The Indian market includes people with diverse incomes, allowing a significant number of people to afford the product. The customers are price-sensitive; hence the price has to be affordable. There is a high potential for profits, but there is delayed payback because of the need to invest in the necessary infrastructure like charging stations. For Malaysia, the government is offering incentives to EV manufacturers. There is potential for high profits, with a relatively shorter payback timescale. In Indonesia, there is a potential for moderate profits. However, the need to establish an appropriate distribution network means delayed payback. For Thailand, government incentives will lead to moderate profits. The timescale for payback will be moderate. For Vietnam, despite the infrastructural challenges, the potential for first-mover advantage leads to moderate profits. There is a delayed payback due to the need to establish the required networks for EVs in the country. The profitability of Singapore is low. Despite the advanced infrastructure, the market is saturated leading to intense competition. The market has a shorter timescale for payback.

Market size

IIndia has the largest market size due to its high population size of more than 1.4 billion people. The country has worked towards driving the internal market, which has grown its market (Nachnani & Swaminathan, 2017). There is a significant latent market potential for EVs in India. The Malaysian market’s size is moderate, due to the steady economic growth. According to Michael, Hungund & Fernandes (2022), the Indian government has an ambitious roadmap for pure electric vehicles. As a result, the government is providing support for EV manufacturers, meaning the market will continue expanding in the future. In Indonesia, the market is high, being the largest market in Southeast Asia (Veza, 2023). The market is untapped meaning it has significant growth potential. In Thailand, the market size is moderate. There is however room for growth as the government invests in infrastructure to support EVs. Vietnam has a moderate market size, which according to Minh (2020) is growing rapidly. The rising middle class presents opportunities for the growth of the market. For Singapore, the market size is small. The people have a high disposable income, leaving room for growth in the premium segment.

Market Ranking Process

Before establishing the market ranking process, it is important to justify the market ranking criteria.

* Market size (Weight 30%): The market size has been assigned the largest weight because is it crucial in establishing the potential for sales. When the market size is large, the customer base is large, leading to higher future sales for BYD Auto.

* Profitability (Weight 25%): Profitability is critical but it has been weighted slightly less than market size. This is because there must be a balance between sales and returns, and a larger market size influences profitability

* Accessibility (Weight 20%): Accessibility is critical for efficient market entry and successful operations. The slightly lower weight than profitability acknowledges that while it is critical, it serves to increase profitability.

* Government support (Weight 15): Government support is needed to ensure compliance. The moderate weight demonstrates that government support is not the main driver in a market, but rather an enabler of processes.

* Cultural Affinity (Weight 10%): Cultural affinity considers the openness and acceptance of a country towards EVs and Chinese Brands. It has been assigned the least weight because while important, cultural affinity entails high uncertainty.

Below is a ranking Process table:



Weighting



India



Malaysia



Indonesia



Thailand



Vietnam



Singapore



Market Size



30%



9

(2.7)



7

(2.1)



6

(1.8)



8

(2.4)



6

(1.8)



5

(1.8)



Profitability



25%



9

(2.25)



8

(2)



6

(1.5)



7

(1.75)



6

(1.5)



4

(1)



Accessibility



20%



8

(1.6)



8

(1.6)



5

(1)



7

(1.4)



4

(0.8)



9

(1.8)



Government Support



15%



7

(1.05)



8

(1.2)



5

(0.75)



7

(1.05)



4

(0.6)



8

(1.2)



Cultural Affinity



10%



7

(0.7)



7

(0.7)



5

(0.5)



9

(0.9)



4

(0.4)



5

(0.5)



TOTAL SCORE



100%



40

(8.3)



38

(7.6)



27

(5.55)



38

(7.5)



24

(5.1)



31

(6.3)



Scoring: 1 (extremely unattractive) to 10 (extremely attractive)

Based on the results of the ranking process, India is the most suitable target market for BYD Auto. India has the advantage of a large market size, which has a high weight. It also balances strengths across a majority of the aspects, making India a strategic choice. It is followed by Malaysia, Thailand, Singapore, Indonesia and Vietnam. While Singapore has the most developed infrastructure, the market size is small and concentrated, hence making it less attractive, and way behind markets like Malaysia and Thailand.

Fine market screening of India