It might just be that, since BYD is serving such a large domestic market/population, that allows them to have cheaper cars? Something something, economies of scale. I’m no expert though.
Sustainable implies that they can keep doing it forever without changing. Switching later means what they are doing is not sustainable. It might be successful, but its not sustainable.
There’s sustainable practices and sustainable businesses. The latter is what others are arguing. Undercutting competition to take over a market is a sustainable practice IF you can hold out long enough. I’d wager the country of China can hold out longer than General Motors.
But the business model has to change in order to survive. The company cannot undercut forever, it actually needs to change in order to survive.
The business model of today is not sustainable. They may have a large warchest, they may be able to crush GM, but once they do, or the warchest runs out, the business model must change.
If you want to make the argument that their overall plan with the later change is sustainable, thats fine, but this current phase is not sustainable.
BYD is already facing scrutiny for running Evergrande like accounting, and a lot of political pressures from other Chinese manufacturers.
The risk is that they collapse like Evergrande, and that they drag public debt into it. The CCP might prop them up, so it light be safe.
A car is different from a book, because you need lifetime service for it. If they go under, you might lose access to parts.
While they are subsidised, the Chinese are really good at low cost manufacturing. It’s not the cheap labour anymore but factory automation and robotics. They really outclass anyone else.
China doesn’t have a national minimum wage, but minimum wage is delegated to the local level there and definitely exists in every single province. Just echoing what the other user said, literally everything you said here is easily disprovable.
https://www.china-briefing.com/news/minimum-wages-China/
They actually have a problem with workers or the lack of them and they have invested heavily in robotics. They aren’t the China of the 70s and 90s. It’s really something that we need to face up to if we want to compete but our political class isn’t really ready for that sort of reality. Years behind because of smugness.
The financial fuckery is that they’re very heavily subsidized by the CCP. It’s not sustainable.
I’d argue it is.
Just look how Amazon got where it is now: Sell way under market price, till local competition closed shop, then squeeze.
It’s unsustainable to keep prices lower than costs. The Amazon example didn’t have low prices forever.
Yes, I know. That’s why BYD is going to
then squeezethe customers once they are locked in.Thus, not sustainable, as I said.
It worked for Wal-Mart
Which isn’t really a sustainable business model, but it’s quite successful
It didn’t work for Walmart the same way it didn’t work for Amazon
What is sustainable in today’s economy?
Really, what Western corporation actually base their policies on sustainable growth?
Take your time. I’ll wait.
…
All of them that I know of. Which corporations do you see running unsustainable business models until they fold completely? Take your time, I’ll wait.
The point is that they eventually change their tactics. In this case, they’ll have to eventually increase their prices.
Even big companies ran gigantic losses for years, just to undercut the competition and emerge as the only winner.
Some do it because they have other cash cows Epic store milking Fortnite), others have VC funding, like Uber.
Yes but after they win they have to raise prices…
It might just be that, since BYD is serving such a large domestic market/population, that allows them to have cheaper cars? Something something, economies of scale. I’m no expert though.
There is a limit to that effect, though. And most observers agree that the state is subsidizing heavily.
I think your muddying sustainable and successful. It definitely can be successful, but its not sustainable.
Its also high risk, especially if you can’t crank up the prices enough later
https://feddit.org/comment/7714367
Sustainable implies that they can keep doing it forever without changing. Switching later means what they are doing is not sustainable. It might be successful, but its not sustainable.
There’s sustainable practices and sustainable businesses. The latter is what others are arguing. Undercutting competition to take over a market is a sustainable practice IF you can hold out long enough. I’d wager the country of China can hold out longer than General Motors.
But the business model has to change in order to survive. The company cannot undercut forever, it actually needs to change in order to survive. The business model of today is not sustainable. They may have a large warchest, they may be able to crush GM, but once they do, or the warchest runs out, the business model must change.
If you want to make the argument that their overall plan with the later change is sustainable, thats fine, but this current phase is not sustainable.
BYD is already facing scrutiny for running Evergrande like accounting, and a lot of political pressures from other Chinese manufacturers. The risk is that they collapse like Evergrande, and that they drag public debt into it. The CCP might prop them up, so it light be safe. A car is different from a book, because you need lifetime service for it. If they go under, you might lose access to parts.
You forgot the part where they raised prices on everything.
https://feddit.org/comment/7714367
While they are subsidised, the Chinese are really good at low cost manufacturing. It’s not the cheap labour anymore but factory automation and robotics. They really outclass anyone else.
They’re not “good” at it, they just have no minimum wage and no semblance of annoying things like worker protections or unions to be concerned with.
China doesn’t have a national minimum wage, but minimum wage is delegated to the local level there and definitely exists in every single province. Just echoing what the other user said, literally everything you said here is easily disprovable. https://www.china-briefing.com/news/minimum-wages-China/
Glad you learned something!
They actually have a problem with workers or the lack of them and they have invested heavily in robotics. They aren’t the China of the 70s and 90s. It’s really something that we need to face up to if we want to compete but our political class isn’t really ready for that sort of reality. Years behind because of smugness.
We can’t compete with a country that pays their workers $1/hr without doing the same.
That’s just patently false. https://en.wikipedia.org/wiki/All-China_Federation_of_Trade_Unions
Like all things in China, this is owned by the government, making it pointless.