BYD swaps to dealership sales in Australia
In a dramatic change of direction, BYD electric cars are to be sold through dealers rather than direct to the public.
Just days after launching its first permanent local model, the BYD Atto 3, local sales agent EVdirect has announced a new agreement with Australia’s largest dealer group, Eagers Automotive.
The two entities have entered a non-binding Term Sheet (agreement) to establish a new dealer group to exclusively sell BYD products for the next five years in Australia.
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The new company will be owned 51 percent by EVdirect and 49 per cent by Eagers.
Previously, EVdirect had announced a direct-to-customer retailing model via the internet with MyCar service centres acting as the delivery point.
It is as yet unclear what – if any – role MyCar now has.
Dealers and after-sales across Australia
Under the Term Sheet, the dealer group will be created to operate under a national franchise agreement to provide retail sales and after-sales service centres for BYD in all key Australian markets for an initial period of five years.
“With its unrivalled Australian network, retail expertise and leading customer proposition, Eagers Automotive will provide the foundation for BYD Australia to fast-track its expansion in the Australian market,” EVdirect managing director Luke Todd said in a statement issued by ASX-listed Eagers.
“BYD has an aspiration to grow into a top five automotive brand in Australia by sales volume in the next 18 months. BYD’s EVs are known for leading edge technology, superior range and pricing that is on parity with comparable high-quality petrol vehicles, making them ideally suited to the Australian market.”
Was this expected?
Todd made no mention of the fundamental change in BYD’s Australian marketing plans during a gala launch of the Atto 3 in Sydney last weekend.
However, indications something was potentially afoot came late last year when BYD Australia advertised for an Electric Passenger Car-Channel Development Manager to develop and establish a dealership channel and structure of BYD’s electric passenger vehicles.
“We have been impressed with the approach Eagers Automotive has adopted to provide retail solutions that are responsive to the changing demands of car buyers,” said BYD Australia general manager Wing You.
“It is very much aligned with our thinking and our plans to take BYD to market in Australia. When combined with their scale, track record and geographic reach in all key markets, we believe the new combined partnership will further complement the existing strategic plan to expedite BYD’s ambitious growth plans.”
Eagers Automotive CEO Keith Thornton also enthused about the new deal.
“We are very excited to be the retail partner for BYD Australia and EVdirect.com as they enter the Australian market. BYD has clear ambitions to quickly grow its presence in Australia and increase EV penetration amongst Australian customers. This confirms Eagers Automotive at the forefront of Australia’s transition to a cleaner vehicle future and recognises our national footprint, geographic diversity, retail expertise and commitment to providing innovative solutions for the future of automotive retail.”
Eagers sells most brands available in Australia today including Toyota, Hyundai, Kia, Ford and BYD’s Chinese rival MG.
Moving the goalposts
This is the latest in a series of twists and turns in Todd’s development of the BYD brand in Australia that can be traced back to plans to build electric cars in Adelaide that was announced in 2019 but never proceeded.
Similarly, promises to build BYDs at a greenfield site in NSW have also now stalled.
Todd has also made a series of commitments on delivery dates and model pricing that have not been kept. The Atto3 was originally promised to be priced as low as $35,000 but launched at $44,990 drive-away.
The next model due in Australia is a small hatchback that could be called Atto 1 or Atto 2 when it arrives late in 2022 or early 2023.
Without being unkind, the credibility of EVDirect as a BYD distributor is even more questionable after the Eagers deal. What about the relentless claims from EVDirect about the 30% dealership margin that they would save Australian buyers of BYD EVs by cutting out dealers? So does that mean BYD EVs will now be significantly more expensive?
It’s been hogwash from the start.
It’s been rather chaotic hasn’t it? Right from the start… Nexport promised EV manufacturing in Australia (cars and buses) which has since evaporated, the BYD e6 ‘taxis’ imported and mothballed, the BYD Dolphin to arrive last year at ‘under $30K’, the agency model, EVDirect now a dealerships model… and the somewhat outlandish claim, still being made, that BYD will be in the top 5 for passenger vehicle sales… in 18 months! So that’s zero to 5000 – 6000 vehicles a month, by end 2023! If we take the start of this meteoric rise from the arrival of the Yuan Plus in July!? The sad thing is that BYD is an impressive company with great vehicles. I’m not sure recent history and performance of their local partner is helping establish the brand value they deserve.
Guess how confident I am of after sales service and having the warranty honoured?
A car is a 5 year relationship. This is not a company I would ever get into bed with.
Why must we always be so negative….the price is very competitive when compared with similar cars…it now has a real local presence with showrooms delivering to opportunity to touch, feel and drive and a service department to back you up. Really Tesla is now no different with all of the above and the worlds biggest main stream margin on their cars.
Maybe they went with Eagers to increase confidence? Certainly the expected cost of the atto 3 is $10K higher than originally suggested. Dissappointing