BYD New Energy Vehicle Strategic Cost Management Research

Energy problems of traditional fossil exhaustion and environmental pollution problems of fossil energy use make the new energy vehicle becoming future development direction of the global automobile industry.The new energy vehicle industry belongs to the emerging industry.Due to the fact that various relevant technologies are still in development,so stable competitive landscape has yet to form in the world.China saw this trend and launched policies to actively promote the healthy and rapid development of the new energy vehicle industry since 1991.Under the guidance of state subsidy policies,the new energy vehicle industry has been developing rapidly.In 2015,China successfully won sales champion of the new energy vehicle in the world.Until then,China has achieved the first phase of the victory.Based on this,the government have gradually cut subsidy standards since2017,to speed up marketization of the China's new energy vehicle industry.Under this background,firstly,the competition between domestic new energy automobile enterprises will become fierce;Secondly,so far,the new energy vehicle that was produced by foreign well-known automobile enterprises have not entered the domestic market because previous government subsidy policies only apply to domestic new energy automobile enterprises,with gradual marketization of the domestic new energy vehicle industry,well-known foreign new energy automobile enterprises will form a great threat to domestic new energy automobile enterprises.Therefore,the competition situation of the domestic new energy vehicle industry is not optimistic in the future.In order to survive and develop,it is very crucial for domestic new energy automobile enterprises to obtain long-term competitive advantages.And strategic cost management that enhances enterprise competition ability and improves enterprise competitive position becomes the inevitable choice of domestic new energy automobile enterprises.The author take the BYD company that develops best and is committed to the new energy vehicle as an example,through researching BYD's strategic cost management of the new energy vehicle business to further improve it,as well as to provide reference for other enterprises of the new energy automotive industry.The author analysed the strategic cost management present situation of BYD Company Limited' s new energy vehicle business from three sides: the value chain,strategic positioning,strategic cost drivers,and founded BYD's strategic cost management of the new energy vehicle business existed excessive vertical integration;lack of communication with suppliers,dealers;decline of the strength in research and development,these problems led to excess inventories,insufficient funds,lower quality of products,lower sales levels and lower research and development levels,etc.Furthermore,these problems have hindered the competitiveness improvement of BYD's new energy vehicle business.Therefore,based on these problems,the author proposed corresponding solutions.First,BYD should outsource the low-value-added businesses as non-core businesses to adjust the internal value chain of BYD's new energy vehicle business.Second,companies should make strategic alliances with suppliers and distributors to reduce inventory,improve product quality and raise sales levels.Finally,the enterprise should be based on the adjusted value chain,targeted to intensify research and development,to enhance the level of research and development,and to improve competitiveness of the BYD's new energy vehicle business.