China’s BYD Opts for Hybrid Dealer Model in Mexico

Most Mexicans think of designer shoes or expensive handbags when they think of upscale department store Liverpool. However, as a dealer for Chinese automaker BYD’s electric vehicles and now plug-in hybrid electric vehicles, things could be changing.

Fernando Castillo, BYD Mexico’s head of sales and dealer development, says the distribution model is China, where about half of consumer vehicles are sold in shopping malls.

Although Liverpool is the only non-traditional dealer of 11 BYD groups in Mexico, it has an array of assets that makes it uniquely relevant for BYD’s entry into the Mexican market this year. “We have exhibition space, cash, credit and customer traffic,” says David Garcia, director of Liverpool’s automotive division. The dealer agreement gives Liverpool access to half Monterrey, Guadalajara and 45% of Mexico City. These three metro areas account for about 70% of auto sales in Mexico.

Garcia adds that Liverpool is Mexico’s second-largest credit card issuer behind Spanish-owned BBVA­ bank, with over 6 million active accounts.

Liverpool has 124 stores, owns 28 of the shopping malls where they are anchor tenants, 181 midrange Suburbia department stores and a half-stake in appliance retailer Unicomer with stores in Central America and the Caribbean.

Liverpool’s strategy for BYD includes stand-alone dealerships, separate dealerships in shopping center parking lots and showrooms inside its malls. Garcia says he’s trying all options with the first four dealerships for 2023 in Mexico City and plans to open four more next year, In Mexico City, as well as Guadalajara, Monterrey and Cuernavaca.

The typical layout of the dealerships has space for about 10 cars and includes four work bays for maintenance.

Garcia adds that some of the uncertainty over buying an electric car is mitigated by the trust and history of Liverpool, which was founded in Mexico in the mid-19^th century.

BYD’s Castillo says the launch strategy has shifted from being purely BEV with the Yuan Plus compact SUV, Han midsize sedan, Tang SUV, Seal sports sedan and Dolphin hatchback to include the Song Plus PHEV SUV.

An ambitious sales goal of 5,000 vehicles for 2023 appears to be just that, with actual numbers probably less than half for the year, according to Castillo. However, with the arrival of the Song Plus and the addition of an undisclosed “considerably more economical model” (likely the Seagull [pictured, below]), Castillo has set an even more ambitious sales goal of 50,000 vehicles for 2024, as he plans to increase the number of points of sales from 50 for 2023 to 80 for next year. The steep sales increase projection would be highly dependent on the Song Plus PHEV, with Castillo predicting BEVs will account for only 20% of his sales mix for 2024.

BYD Seagull-yellow_0

Liverpool clients have the option of consumer financing through the store, as well as through BYD, which has teamed up with Spanish bank Santander.

While Tesla continues to tease a sub-$30,000 BEV, the reality is already in Mexico with the Dolphin, which is priced at about $30,000 and is available in three colors: Cheese Yellow, Afterglow Pink and Dolphin Grey. On the higher end, the Tang sells for $80,000 for a fully electric 3-row SUV. All models come with a 7-kw home charger to supplement a meager network of an estimated 2,500 public charging stations in Mexico.

Chinese automakers in Mexico currently have 10% of a market of about 1.4 million vehicles. SAIC’s MG is a top-10 seller, with other Chinese nameplates including JAC, Geely, GWM (Ora, Haval), BAIC/Changan/JMC, Chirey/Omoda, Jetour/Jaecco, Arra, SEV and BYD.