Cost Management Of BYD

October 2009

BYD Huizhou iron battery is likely to be automatic assembly line, only a few.

E6 and F3DM have common production lines in Huizhou.

The Xi'an plant now has about 1400 cars per day, G3 has only 90 cars, and the rest are F3 and F3R. This is the limit. It is not possible to increase production capacity until the second half of next year.

Pingshan added 1 flexible pipelines, mainly F6 and M6, and the capacity of BYD motor in S62010: F3+F3R=45, G3=10, F0=20, F6=12, M6=3, S6=2, 900 thousand.

BYD's cash flow in the 3 quarter of 2009 is high. BYD's cash flow should be equal to the last 2 and a half months.

In the 1 quarter of 2010, when the sales volume reached 200 thousand vehicles, the cash pool would expand to 10 billion.

So BYD's car sales are the key to maintaining cash flow

If sales can break through 300 thousand vehicles in the fourth quarter of 2010, the cash pool can achieve an astonishing 13 billion or so, so BYD basically does not need any loans, and its asset liability ratio will plummet.

The three quarterly report in 2009 showed that as of the end of September, BYD's operating cash inflows amounted to 8 billion 750 million, which not only met the 4 billion 600 million demand of its investment (business expansion), but also repaid 2 billion 300 million of its loans before last year, with a net cash increase of 1 billion 830 million and BYD cash in abundance.

IT is not as lucky as the car business, because Nokia and other buyers are 3 months' payment period.

The cash flow of the main engine factory is a common phenomenon, but profits like BYD can not be magnified very quickly, so many mainframe factories can only borrow less, or even some of the funds lie in the bank, and they dare not expand their production.

Chery is also the case, Chery cash flow is certainly not bad, but the profit is not ideal, and the expansion of investment is too large, the expansion of production mainly depends on profits, cash flow is booster, so Chery went astray, to build a shipyard, real estate has gone, no profit engine, booster, can not rocket ascension, everything is for sale, sales volume is the guarantee of cash flow, why Chery does not advertise? Advertising is a matter of throwing money, Chery now has little profit to do advertising, low cost is the basis of all sales, but the BYD is too thorough, simple to achieve the ultimate goal, is China's Dell and Sam Walton.

BYD has brought its low cost advantage to all aspects such as investment, price, advertising and so on, so that the opponent can not have any chance. If the opponent does not have high profits, it will not be possible to expand production. Even if the cash flow is abundant, he will not continue to invest in the auto industry. Geely will take the cash flow purchase, and Chery will do the real estate.

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Just like the former Chunlan air conditioner, it is known that there is no loan. At that time, air conditioning sales are cash settled, raw materials are on credit. As in the automotive industry, no loan does not mean a good profit. Chery has lost its way in the new round of expansion and competition. The fastest factory will also be put into production after 2011. BYD is really a speeding marathon.

In 2012, the capacity ratio of BYD and Chery was 2 million: 800 thousand

Chery is a little rich and ready to live, hungry and dead, with lots of cash on hand, he dare not invest, because investment, because no profit, cash flow is no more, neither profit nor cash, can only slowly wait for aging.

After 2012, BYD's iron battery, ferrosilicon combination, solar energy and energy storage station come up, and cars can be listed separately.

China's automobile industry is in the stage of rapid expansion of production capacity, and the mode of car sales will not change for a while. BYD will take advantage of this opportunity. BYD's domestic share of 30% is a bottom line. In 2009, the vehicle market is 13 million vehicles. In the future, there are 20 million potential vehicles, which are basically in the middle and low end of 2/3/4 line cities and 1 line cities. Within 20 million years, 20 million of 30% is BYD's real goal, 30% is the bottom line, 50% is the target.

Wang Chuanfu is Liu Bang's superior, their hometown is also relatively close, "single happiness is not as good as music," executives hold stocks, do not care about the company's treatment, executives have no special treatment in the company, so employees are also very simple, natural cost is low, like Sam and Walton, BYD executives are not, because saving 1 yuan cost, in the capital market can magnify 15 times.

Executives from various departments hold stocks. Because they are their own businesses, executives have a strong sense of responsibility. BYD enterprises are big but strong cohesive.

BYD only chose the auto industry, the industry chain was long enough, BYD became the industry black hole, BYD's industrial chain was like the batching chain of INTEL company CPU.

It's very complicated, but the efficiency is amazing.

BYD's super speed marathon can afford technology, catch the market and reduce costs, which is BYD's rigid strength.

It is said that BYD has a 3 year salary doubling plan. It is estimated that the new manpower policy is starting to take place. BYD gradually rises from the civilian enterprises to the elite enterprises. The informal employees of Shanghai mass pipeline are only more than 2000 yuan a month, and the BYD line employees pay about 1800.

The initial investment cost of pumped storage power station is 4000 yuan / kW, and the construction time is 10 years. Compared with BYD energy storage power station, it can take 3-4 years, so the investment cost will increase by about 15%. The cost will be 4600 yuan. In the 20 years used, the pumped storage efficiency is 70%, and the efficiency of storage power station is 90%.

The price of BYD energy storage station is 7000 yuan / kilowatt.

Technology is only a condition, accounting for 5% of the company's success. The rest is social development trend, cost, management and human nature.

The simplest train can run the most luxurious carriage, even if the cost of a carriage is 10 times higher than that of a train.

Take IT as an example. Good technology is not always successful, but also needs market. If your technology exceeds the US, there is basically no market.

F3 is the best cut point of the technical curve and cost curve. From the mathematical model of industrial engineering, there is basically a 2:8 rule. Our society is basically in line with the 2:8 rule. Wang also said: "we will not increase the cost of 1% for the technology of 100%."

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Single technology and cost are not difficult. Geely can not imitate Rolls-Royce. The key is compound ability. The difficulty of compound is higher than that of single dimension. It is a sharp increase in geometry. Just like integral in mathematics, one integral is simple, but the two integral is rising abruptly.

It is difficult to find a solution. It is difficult to implement the plan because people need to achieve it, but human nature is the most difficult to grasp. But Wang has a good grasp of it, which needs to overcome human weakness.

BYD is not very simple. It is not the success of one dimensional technology. It is the success of multidimensional geometric difficulty.

Since 1900, basically, only the Wang An computer company can compare with BYD in the Chinese world. Of course, I mean the rise of the Wang An company, because Wang An failed to overcome the weakness of human nature and led to the failure of the company. Bill Gates most admired Wang An company and DEC company when he first came out. Wang An is Harvard's genius, also a technology genius, and finally becomes a meteor.

BYD is relying on manual and fixture to reduce costs, and BYD has its own equipment development department. Most of the equipment in the workshop is developed by itself, and tens of thousands of pieces are bought outside, and only tens of thousands of pieces are needed for its own production. Moreover, the equipment can be continuously improved and the reaction speed is quite large. It will not be restricted by the commissioning of some equipment and equipment suppliers. It is very clear that it is very rare for the eyes to see that this practice is rare in China. Many enterprises are importing or buying ready made products, and are very few in their own research and development, while BYD's engineering manufacturing capability is quite strong. The mobile phone business department is NOKIA, MOTO, SUMSUNG, and has high quality level.

2009 is the first year of new energy sources for electric vehicles, solar cells and energy storage stations. It is impossible for Buffett to sell BYD shares in the first year of new energy. Sino US energy and BYD cooperate with energy storage stations. PacifiCorp, a subsidiary of Oregon, recently built a building with 10 40 foot container sizes to store BYD's batteries. A 40 inch container can contain 200KW (0.8MWH) batteries, and 10 is 2MW (8MWH) energy storage power station. The scale is not too large or experimental.

The BYD Changsha plant of Hunan Environmental Protection Technology Industrial Park is currently under intense construction. The assembly and welding workshop has been excavated. The first phase of the project will be completed in 2010 and the commissioning of the BYD electric bus will be completed.

It is reported that after the BYD new energy vehicle base is built, it will undertake the annual production capacity of 5000 B6, B9 pure electric buses and 10000 chassis.

BYD is now an aircraft carrier that has just completed its skeleton. It is strong and perfect. It was almost completed in December 2011, when BYD really sailed to sea.

BYD's recent plan:

1, January 2010 Shangluo 100MW solar cell put into operation

2, January 25, 2010, E6 officially offline.

In 3 and March 2010, BYD delivered 30 E6 to Beijing.