BYD Co Ltd is ramping up efforts to bolster its electric vehicle business and boost global expansion, after the company announced the launch of FinDreams, a new sub-brand which specializes in core component production for clean energy vehicles.

The sub-brand was unveiled in mid March. It is supported by five subsidiaries, namely FinDreams Vision Co Ltd, FinDreams Technology Co Ltd, FinDreams Moduling Co Ltd, FinDreams Battery Co Ltd, and FinDreams Powertrain Co Ltd. Each unit specializes in different key fields of auto manufacturing.

According to BYD, the establishment of FinDreams also marked a key step of the company’s go-global strategy. The five subsidiaries supporting the sub-brand will be granted more autonomy and help the company expand the reach of its EVs to consumers around the world.

Industry experts said BYD’s move is part of its global expansion strategy.

“For the overseas market, the independent system has more autonomy, greatly increasing the cooperation possibility and the degree of freedom, which can even attract the integration of external capital and the exchange of technology. Plus the background of its parent brand BYD, the newly established brand will definitely bring in benefits,” said a report from MiVoGarage, a Shanghai-based automobile WeChat official account on the industry.

The 1Q 2020 Electrified Transport Market Outlook report issued by Bloomberg New Energy Finance said growth momentum in the world’s EV sales weakened last year. The rate stood at a mere 10 percent yearly growth, or 200,000 units of increments, compared to the level reached in 2018.

However, sales in Europe may surge this year, which is expected to offset the nearly flat EV sales in China and the United States. As a result, global EV sales will continue to grow, to an expected 2.4 million units, BNEF said.

With an eye on opportunities in the European market, BYD has charted expansion plans in overseas EV markets. So far, the company’s electric cars have reached consumers in more than 100 cities across more than 20 European countries. They include Amsterdam, London, Brussels, Oslo, and Turin in Italy.

BYD will continue to enhance cooperation with partners in Europe this year to help deepen the electrification of European public transportation vehicles. This would be done in countries such as the United Kingdom and the Benelux nations. It would offer new energy solutions to local governments, the company said.

Shi Jinman, an automobile analyst at Guotai Jun’an Securities, said BYD had long made plans of separating its component production business as early as 2017. The company started to accelerate that move last year.

“The establishment of the independent brand benefits the company as the move makes it easier to reach more clients from both the domestic and overseas sectors. In addition, the overseas subsidiaries can work more efficiently on making decisions such as building local plants, and take advantage of BYD’s digital channels to boost global expansion,” she said.

For automobile companies that are going global, localized plans are key to their expansion strategy. Companies should conduct user group analysis in target markets to better tap the local market. There are usually no big returns earned at the beginning of going global, the cost could be high, and this will bring certain pressure on companies’ cash flows, Shi said.

BYD said despite the challenges brought by the novel coronavirus outbreak, the company’s resumption rate has recovered to over 80 percent. It added the previous tightness of upstream and downstream supply chains was also eased.

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