BYD approach toward Global South market

Whenever I visit foreign countries, it’s always interesting to see the different car models that I don’t normally see in America. Even in other developed countries like Italy and Spain, the cars I see a generally smaller and more fuel efficient than what I see in America. There just aren’t that many large premium sedans or SUVs driven around.

Which brings us to Global South countries. About 10 years ago, I was friends in Malaysia. When my friends were introducing to me the different models that were popular there. One such model was Honda City. I was really surprised by that because I always saw Honda Civic as the cheapest compact sedan that you buy from Honda. If you have some wealth, you should get at least Honda Accord or Toyota Camry, which are bigger and more for families.But no, I learnt that time Civic was actually considered a higher end car in Malaysia. City was a model that Honda brought to much of Southeast Asian countries. Since then, it’s been like that everywhere I go. Most recently when I visited Morocco, it seemed like every car was Dacia Logan. I have never seen a Dacia car before then and I have definitely never heard of the Dacia Logan model before that trip.

What is the point of this? Well, this is about what BYD really needs to do win over the global south or even many European market against VW, Toyota, Stellantis and Honda. Here below is a list of the top selling passenger vehicles in Brazil in December up to 19th.

You will see in a chart later, but every car in top 10 list is small. In China, BYD is selling Destroyer 05/Qin+ for < 59.8k RMB after the government trade-in subsidies. Qin+ is considered an entry level sedan in China, but it is still much longer and wider than every model in this top 10. You will see that Song family is the best selling BYD model in Brazil. That trend started after Black Friday sales. Song Pro is considered a low cost entry level SUV in China that is getting down to close to 100k RMB, but it is a humongous car compared to everything in front of it.

Fundamentally, this shows that China and US market have very similar taste for large sedans, SUVs and Minivan/MPV type of cars. It is important to have large family sized cars where up to 7 people can sit in. There is a reason that Mercedes Benz, BMW and Audi have sold so well in China for so long. The market prefer the large sedans and SUVs they sell. All of this is kind of strange since China’s per capita GDP is closer to South American countries than European countries. However, due to the lower cost of high quality cars in China and the cultural custom for many family to have just 1 car (at most 2 cars), they typically go for just 1 large vehicle.

This next chart is the sales of light commercial vehicles in Brazil in December up to 19th. So the top of this list is mostly pickup trucks.

You will see there is no Ford F150 here. The most well known pickups here are Toyota Hilux and Ford Ranger. I have never heard of any of the top 3 models before reading about BYD Shark 6 entrance into Brazilian market. There was a report recently about BYD bringing in a Fiat Strada to study so that it can build a Shark 3 Pickup truck to compete in the entry level market. The chart below will show what I mean by Chinese cars being large

.You will see that Shark 6 is the largest Pickup truck on this list. It’s larger and cheaper than main competitors Hilux and Ranger. It is way larger than Fiat Strada. Shark 6 was originally designed with Australia and Mexico in mind, so it would make sense that BYD’s first Pikcup/UTE model target Hilux & Ranger. But smaller Pickups for Fiat and VW are what the Global South market actually buying in large numbers. Similarly, one can see that BYD’s mini-car (Seagull), hatchback (Dolphin), compact sedans (King), SUVs (Song) are mostly larger than the best selling models in Brazil when comparing wheelbase, width and height. Even the Dolphin is longer than every model in top 10 by wheelbase and wider than all except 2. In China, Dolphin and Yuan Up are both entry level models. In Brazil, Seagull is actually the perfect sized car. In fact, BYD rivals like MG, GWM and Chery are all much better situated in overseas market when it comes to product offerings.

So, what does all of this tell us? BYD needs a smaller PHEV version of Seagull, Dolphin and pick up truck. Many people in Brazil and other Latin American countries have to drive long distance to work. The charging infrastructure is about a decade behind China. While Seagull and Dolphin are probably well sized, it would only appeal to city folks that have their own private chargers. We are at a point now where BYD needs to be developing cars for foreign market if it wants to sell more overseas. It can no longer just design cars for China and see what might work in other countries. Cars in China are too big for most of Global South countries.

Why haven’t we seen a PHEV version of Seagull? Well, it doesn’t make sense in the Chinese market since you can get a compact PHEV sedan like Qin+ for just 10k more than Seagull. You would need to fit a small DM system & ICE engine inside Seagull, which may take up too much space. However, I do think that is coming. DM6.0 promises to be really compact and I’m sure they can develop a 0.8T engine for compact cars that also hold maybe 8 kWh battery pack. It will be way more fuel efficient than Toyota and Honda HEVs, since battery storage allow engine to continue generating electricity at most optimal time rather than when energy is needed.

I would think this is more of a 2026 type of unveiling. Until then, it will be more of an adoption of their existing smaller models. That’s why the first model to be produced in Brazil will be Song Pro DM-i that works with Ethanol fuel. BYD is clearly willing to adapt to local environment.