BYD just has had a 30% drop in profits. So the answer is they do not get away with it. They are among the best Chinese car makers too. A lot of them loose money. The fundamental problem is that China built up a massive local car industry. Not for export, but for the domestic market. This was massivly supported by local Chinese governement, which gave subsidies to built car factories. Globally nobody cared that much, but Covid destroyed car sales in China and they so far have not recovered. The factories have been built, so it makes economic sense to just built cars in them, if the losses of doing so are lower then taking on the loss of the entire factory. Obviously export is a great solution for that problem and obviously Western car makers are not happy about having to compete with companies, which basically have free factories.
We probably will see a lot of bancrupcies in the sector and some of the large ones survivng and doing well globally. BYD is probably among them.
China is dumping and drop shipping these cars. If Carney allows this, he’s basically going to shut down the auto sector in Canada and 440,000 jobs. Australia did this, and now they have all the shitty Chinese cars they want.
The question is for the long term: is the auto sector worth the billions of continual subsidies? Australia did the math and concluded not.
BYD just has had a 30% drop in profits. So the answer is they do not get away with it. They are among the best Chinese car makers too. A lot of them loose money. The fundamental problem is that China built up a massive local car industry. Not for export, but for the domestic market. This was massivly supported by local Chinese governement, which gave subsidies to built car factories. Globally nobody cared that much, but Covid destroyed car sales in China and they so far have not recovered. The factories have been built, so it makes economic sense to just built cars in them, if the losses of doing so are lower then taking on the loss of the entire factory. Obviously export is a great solution for that problem and obviously Western car makers are not happy about having to compete with companies, which basically have free factories.
We probably will see a lot of bancrupcies in the sector and some of the large ones survivng and doing well globally. BYD is probably among them.
BYD is $30B in debt.
China is dumping and drop shipping these cars. If Carney allows this, he’s basically going to shut down the auto sector in Canada and 440,000 jobs. Australia did this, and now they have all the shitty Chinese cars they want.
The question is for the long term: is the auto sector worth the billions of continual subsidies? Australia did the math and concluded not.
That’s a fair point, the trade off being it pushes people away from cheaper vehicles.