China's BYD restructures European operations after strategic setbacks
China’s top electric vehicle maker, BYD, is revamping its European operations following a series of early strategic missteps, according to six current and former company executives.
Challenges have included difficulty securing a robust dealer network, hiring executives with deep knowledge of European markets, and failing to offer hybrid models in regions less receptive to fully electric vehicles, News.Az reports, citing Reuters.
BYD has moved swiftly to address these early stumbles in this critical export market, greatly expanding its dealer network and offering hefty pay packages to poach executives from European automakers, especially Stellantis, the executives said.
The Chinese EV leader announced in December that plug-in hybrids would be crucial to its European strategy. That decision came after BYD European special adviser Alfredo Altavilla - among the key executives hired in BYD's European reboot - advised BYD Founder and Chairman Wang Chuanfu that a pure EV strategy was still a hard sell in many European countries.
"He was very quick to get the message and give the input to BYD's engineers that every new model would have to come both in EV and hybrid" versions for Europe, Altavilla told Reuters. "It is necessary to educate customers in the green transition."
Hires of some individual European executives have been reported, and BYD has publicly acknowledged problems in the German market. This is the first detailed account of the problems identified by executives inside BYD and its systematic efforts to address them. Most of the executives spoke on condition of anonymity to discuss sensitive strategic issues.
In December, Altavilla announced in Italy that plug-in hybrids would be "at the core of BYD strategy in Europe" moving forward, adding it would be "stupid" to go against consumer preferences by offering only EVs.
BYD first approached Altavilla, a former Fiat-Chrysler executive, last June and announced his appointment in August. He had been working as a senior adviser to private equity firm CVC Capital Partners.
Altavilla in turn hired several rising-star managers from Stellantis, including Maria Grazia Davino to run Germany and a handful of other central European countries, Alessandro Grosso in Italy and Alberto De Aza in Spain. The Chinese automaker offered them significant pay increases and a "chance to grow," a current BYD executive said.
"These were not people that we were happy to lose," said a Stellantis source familiar with the work of the executives poached by BYD.
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