Summary
- It’s the best of times and the worst of times: the Chinese domestic passenger vehicle market is at a historic peak for sales, and a historic low for profitability.
- BYD is now a mature firm with a broad product lineup. Preserving sales requires constant investment in keeping products fresh, and for BYD, investment in strengthening their brand.
- Even still, growing firms such as NIO face the same problem: models launched just a few years ago no longer sell well.
- Berkshire Hathaway has exited its BYD position, I argue for a good reason.
- BYD is expanding globally, so long-term prospects are good. However, I believe that’s offset by near-term challenges, and at $12.26 remains overprice…
Summary
- It’s the best of times and the worst of times: the Chinese domestic passenger vehicle market is at a historic peak for sales, and a historic low for profitability.
- BYD is now a mature firm with a broad product lineup. Preserving sales requires constant investment in keeping products fresh, and for BYD, investment in strengthening their brand.
- Even still, growing firms such as NIO face the same problem: models launched just a few years ago no longer sell well.
- Berkshire Hathaway has exited its BYD position, I argue for a good reason.
- BYD is expanding globally, so long-term prospects are good. However, I believe that’s offset by near-term challenges, and at $12.26 remains overpriced.
Robert Way/iStock Editorial via Getty Images
Overview
The Chinese car market is at a historic high and is larger by far than any other single market. In 2025 passenger vehicle sales (including exports) will surpass 25 million; add in commercial vehicles, and it’s a
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I have under 100 shares of Ford, a company I mention in passing. I have no position in BYD, nor do I plan on changing any of my positions in the next month, much less the 72 hours after publication
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