BAIC Ready for the EV RevolutionBy Andrea Villar | Mon, 09/21/2020 - 18:39
Q: What is BAIC’s contribution to the EV revolution?
A: As the No. 1 brand in sales of electric vehicles in China, we decided to enter other markets, including Europe, the US, Latin America and Southeast Asia. We are proud of our electric vehicles and we are sure that EV is the future, no matter what happens with the price of crude oil. BAIC also believes in protecting the environment, which is another reason why electric vehicles are part of the future.
Q: What have been the most valuable lessons BAIC has learned from the Mexican market?
A: In June 2016, we launched BAIC in the Mexican market. We looked at the US and Mexico as a single market and the first step was to conquer the Mexican side. We do not yet have much experience in the US or Canada but we believe the Mexican market is open to us and the people are receptive to a different brand. That is why we chose the Mexican market as the first country to enter the USMCA area. Despite the renegotiation of the trade agreement, BAIC still believes this is a single market with great potential for us.
The Mexican market for us is the first step in getting closer to other markets. In the past four years, we have learned a lot from this market. In 2019, we sold around 300 vehicles in Mexico and we believe more and more Mexican customers are getting to know the BAIC brand and how our vehicles perform. This is very good for the brand and we are very optimistic about our potential results in the coming years.
With the experience we have gained over the years, we are increasingly confident of entering the US and Canada in the future. Still, Mexico is a very important country for us and we want to develop and increase our presence here, to learn more about the market and to improve our sales.
Q: How are BAIC's SUVs different from other brands?
A: BAIC has five SUVs models: X25, X35, X65, BJ20, and BJ40. In January 2020, we launched the X35 model with the same powertrain as the X25 but with a new design. Also, we will offer the new X55 model in July 2020. The reason we have a wide variety of SUVs in our portfolio is that we believe this segment is more attractive in markets like Mexico. This type of vehicle is gaining popularity in China very quickly and we will have more and more options for our clients.
Q: How ready is the Mexican market for BAIC’s EVs and what is your strategy to overcome the usual cost-barrier associated with these models?
A: In 2016, the same year we launched the brand in Mexico, we tried to introduce our electric vehicles in the country, but customers here remain price-sensitive and EVs are still high-priced products. In China, we receive government subsidies but this is not the case in foreign markets. For this reason, we do not yet offer our EVs in the Mexican market. We have had discussions with the government to launch a leasing program for our electric vehicles based on monthly or quarterly payments. We are also seeking financial help from the Chinese government to offer a more attractive mobility solution for the Mexican market.
Q: In 2018 BAIC was interested in developing a second production location in Mexico. How have your plans advanced in this regard?
A: The COVID-19 crisis has affected not only operations in China but throughout the world. We believe the supply chain has been greatly affected by the advance of the virus and many manufacturing companies will inevitably face a supply problem. The crisis also affected our plans to open a plant in Mexico and other countries. Still, Mexico remains one of our most important overseas markets. In the coming months, we will evaluate where and when we will open new plants.
In 2017, we opened a plant in South Africa that is ready to produce vehicles and we did it with the support of the government. BAIC Group and BAIC International are discussing how we can improve our business in other markets when the pandemic ends.
In January, COVID-19 blew up in China and we had to put 99 percent of our efforts into the local market. Fortunately, with more than the 1.4 billion people working together with the Chinese government, the situation in China is much better compared to the beginning of 2020. Now, 90 percent of business is back to normal.
BAIC is a Chinese OEM that started operations in Mexico in 2016. The company assembles two models at its Puente Nacional plant in Veracruz. BAIC specializes in the commercial and off-road segments