It’s called byd and represents everything China has to win

We do not know how long it will last but we do know that we are living a few days that will happen in the history of financial markets. That they become a mere anecdote in books or that, really, becomes days, weeks or a historical period to study is something that time will only tell us.

Anyway, since last April 2, something has changed in the world car market. Something that threatens to break the market as we have understood so far.

Byd is emerging at a unique opportunity.

A disruptive tariff. “A hole we have never seen”. With these words, Jim Farley, CEO of Ford, defined the possibility of cars to export tariffs to the United States. From April 2 they apply at 25%. A figure that substantially increases each vehicle or that dynamite the benefit that each company can obtain if it does not touch the prices.

The pieces have also been granted to build those cars. For example, if a car is manufactured in the United States, the product has to increase because the transmission, engine or any other piece has been manufactured outside its borders. And, in addition, there are also A 25% tariff to tariff and aluminum They are key … indeed, for car production.

A complicated calculation. The problem of which numerous experts are notifying is that it is impossible for the United States to attract a complete supply chain for all cars that buys in a short time space that is the alleged great objective of the measure.

In BBC They explain with a map the complex process that carries the production of a simple piston, which moves as a fish in the water between the borders of the United States, Canada and Mexico. Farley’s words are also the company that produces the most within the United States After Tesla. The impact despite everything is huge, how to calculate the damage to General Motors, for example?

We know that last year the United States imported vehicles and car parts worth $ 475,000 million in 2024. Of that figure, it is estimated that more or less half were represented by vehicles. And of those vehicles, between 50 and 60% arrived from Europe, they collect in eldiario.es. It does not seem accidental that the European Union is already proposing lift tariffs to industrial goods.

First consequences. Given this context, there are two options. The first, of course, upload prices. It is estimated that, on average, and depending on the base price of the vehicle an American will pay Between 5,000 and $ 15,000 more per car bought.

Given that climb, it is difficult to think that manufacturers can put on the market the same amount of cars as at the moment. Mercedes considers abandoning the sale of Mercedes Gla, one of its less small vehicles and, therefore, with the lowest profit margin, according to Bloomberg.

Those who are not thinking about it are Stellantis. The company has already announced the Temporary dismissal of 900 employees. In addition, a factory in Ontario (Canada) and another in Toluca (Mexico) will be closed two weeks and all month of April, respectively. Toyota, which was already reducing its production in the United States, It is also going down the rhythm in Mexico. And Volkswagen has ordered to stop shipments from Mexico and Europe, according to Automotive News.

The fifth producer. If we quickly review the companies that have begun to make their ads we find that we have talked about Toyota, Volkswagen and Stellantis. If we add General Motors and the Hyundai/Kia group to the equation we have the CInc major cars manufacturers of 2024.

Last year, Byd already touched on the door of this group of the five. Its 4.27 million units produced were placed as the sixth producer of the world. The forecasts for this year are 5.5 million units. If they were fulfilled, last year they would have earned him to overcome Stellantis (5.41 million units) and start seeing General Motors on the horizon (fourth position, he touched the six million units).

Bad forecasts. The worst thing for Stellantis is that the company was already dragging problems last year. In fact, in 2023 it came from touching 6.40 million cars made but their future, especially in the United Stateshe has prevented him. General Motors also lost bellows in 2024 when he made almost 200,000 cars less than the previous year.

In both cases They are especially affected for 25% tariffs to the car. Stellantis manufactures 57% of the cars it sells. And General Motors reduces that 52%figure. In both cases a large part of its production to Mexico and Canada has been transferred where they produce 39% and 30% of their cars, respectively.

The latter is especially important because Canada has already warned the United States that it will impose tariffs of 25% return to cars that export to the country. It is estimated that Canada imported from the United States in 2024 vehicles worth 15,500 million dollars.

Nor are Toyota and Volkswagen saved. General Motors and Stellantis are the greats indicated in this case because they are the closest of Byd. But it is expected that Toyota and Volkswagen face very hard economic conditions if an understanding between Japan, the European Union and the United States is not reached.

Toyota sold in 2024 2.33 million cars in the United States. Of them, only 1.27 million produced within the country. Volkswagen sold more than one million of cars last year in the United States. 80% of cars that it sells there would be affected by import tariffs (and it would be necessary to calculate the increase in those manufactured there).

The right moment. The global car context cannot be, right now, more favorable to byd. The company does not produce vehicles for the United States or manufacture within its borders so it is a market that was non -existent and that will continue to be.

But, at the same time, it is foreseeable that their rivals sell less cars, their prices are more expensive and the most meager benefits. That is, they will be weaker where China is growing: Europe and emerging countries. In 2023 the country It has already become the largest exporter of cars of the world. In 2024 he opened a huge gap With Japan who, traditionally, had been the leading country.

The key. Until now, Chinese cars could fight with the price claim. Your cars are cheaper than those of competition And they come with more complete equipment. If the Volkswagen Group, Stellantis or Toyota are forced to raise their prices to compensate for their American performance, Chinese manufacturers have a golden opportunity in Europe.

This opportunity is specified in the case of Byd with plug -in hybrids That, right now, it is what is best working to the company in countries such as Spain where it points to lower cost vehicles. Mg that already presents a hard battle In the low range also has a lot to win.

For this year, Byd plans export 800,000 cars outside Chinathe double that until now. To achieve this, its performance in Europe is key but also in countries such as Australia, Thailand either different countries in South America where until now other Chinese firms like Chery have already opened hollow.

Photo | Byd

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