NST

It's a tale of two entrepreneurs taking on the world. Tan Sri vincent Tan is familiar to most investors in Malaysia, being a self-made man who founded Berjaya Corp.

Wang Chuanfu is also well-known in China's elite circles, making it to the top of Forbes 2009's list of richest people in China. He's the founder and owner of BYD Company Ltd, a Shenzhen, China-based company.

Both the leaders witnessed the signing of a memorandum of understanding yesterday in Shenzhen to make Malaysia BYD's base for the right hand drive market, for Malaysia first, and then for Asean, and finally for some of the nearby RHD markets like Australia and New Zealand.

The first car planned for the project is the F0, a 998cc petrol engine car, that retails for USD4,000 to USD 5,000 in China. Berjaya Corp has set aside 100 acres of the vast swathe of land that it owns in Bukit Tagar, Rawang, where it also owns and operates the sanitary landfill for part of KL's 6,000 tonnes of waste a day.

The potential of this new business venture has a lot of upside. The world car industry is going through a change where many of the old conventions have been thrown out of the window. In such a time, it's the new companies with a vast array of technologies that will show the way in new energy, low emission vehicles BYD is just such a company. For a nation like Malaysia that still seeks to to be a regional automotive hub, it makes sense for its automotive companies to tie up with high technology companies industry upstarts like BYD Auto.

Some automotive industry critics might scoff at this idea, that a non-automotive company, and such a young one at that – the average age of its 150,000 employees is just 26 – can show any new tricks to the 100+ year old car companies from Germany and the US.

But sometime the truth can be stranger than fiction. New energy cars will be looked at like handphones: how many hours of talktime versus driving range and if stuck in a traffic jam, how many hours of air-conditioning time. How fast can it recharge?

Certainly, the journey ahead for Berjaya Corp in this new venture will have its share of hurdles. Firstly, there is the licensing to think of. The National Automotive Policy is still protective of the sectors where Proton and Perodua. On the other hand, there are other statements supporting industry initiatives regarding electric and hybrid vehicles – areas where BYD Auto is already pioneering in the E6 which was exhibited in the Shanghai Automotive show last year and in Detroit last month.

Originally scheduled for launching sometime in 2011 and now advanced to a launch by Q4 of 2010, the E6 is a full-sized C-segment car and demonstrates BYD's leadership in the new energy car segment.

“The traditional car makers are using small car platforms to be their electric vehicle. We believe that  the EV market must be initiated by organisational users like government agencies and taxi companies,” said Paul Lin, manager and spokesman of the marketing department of BYD Auto's export trade division.

“It's hard to promote a small car to government officials. In Hong Kong, the government said that the E-Leaf is too small for a government official. So that's why our first EV, the E6f, is built as a big C-segment car.

“We already have pilot projects using the E6 in more than 10 major Chinese cities. In Shenzhen alone, we have more than 100 units of the E6 running as taxis. We target to have 7,000 E6 on the road by the end of the year,” he said.

Besides the full-size of its E6 compared to the dimunitive models to be launched such as  Mitsubishi's iMiev, the Nissan e-Leaf, the mini-E and the Smart, the other unorthodoxies of BYD Auto are its business model of building cars and its concept of itself.

Firstly, BYD Auto thinks of itself as a technology company rather than as a car maker.

Secondly, it makes most of the car is made in-house. In Japan, about 70 per cent of the car is supplied by vendors – the external contractors who make components. This has become a norm also in the US.

“Except for the glass and the tyres, we make most of the car ourselves,” said Lin.

“We think that the car business is a moulding business. When you make your own moulds and tools, you reduce a lot of costs. We think that the secret of success is to make even the most high precision moulds by yourself,” he said. Coming from the top producer of mobile phone components, it's easy to imagine that BYD has more than enough technology to make such large components that a car needs.

BYD is a really amazing story. It started business in 1995 as a maker of handphone batteries and by 2003, it had become the world's largest maker of mobile phone keypads and more importantly, rechargeable batteries – nickel camium, lithium – for handphones, laptops, cordless power tools and almost anything using batteries. Its corporate customers almost all the companies in the A list of IT-related companies – Nokia, Motorola, Philips, Samsung, Sony Ericsson, Haier, Panasonic, LG, Bosch, Lenovo and Black & Decker.

Today, it is the fourth-ranking auto company in China after Volkswagen, GM, and Toyota. It made about 450,000 cars last year, a growth of 165 per cent over the previous year. This year, it plans to double its production to 800,000. No doubt the percentages look big because of its small base but the fact remains that this is a company that attracted Warren Buffet's Berkshire Hathaway to buy a 10 per cent stake in the HKSE-listed company for USD230 million two years ago.

BYD's share prices have since gone up nearly six-fold and driven up Wang's net worth to USD5.8 billion.

“For us today, BYD stands for Build Your Dream.  It's origin is actually from our friends in Nokia in the days when handphone batteries was our biggest business. They told us: We “Bring you Dollars”, said  Lin.

Speaking about the right hand drive market, Lin said: “Excluding Japan, the world market for RHD cars is about five million, including Asean's 1.5 million. We've not sold in any RHD market yet. We've a lot of enquiries rom UK, NZ, Australia. It's not probable for us to build right hand drive models in China. We believe it's better to build closer to market and that's why we have plants in Russia, Vietnam and soon, even in such a protected market as Iran.

“We hope that Malaysia can be our right-hand drive base to export to all markets starting with Asean. We prefer working with the Berjaya group because we've built up a relationship since 2007 when their senior management like Datuk Francis Lee and Tan Sri Vincent Tan approached us.

“We need a RHD base and it can't be Singapore or Hong Kong – their markets are too small. That leave Thailand and Malaysia. Thailand is occupied by the Japanese car companies and that leaves Malaysia and the Berjaya group. Even Proton has talked with us, but Berjaya came first,” said Lin

Later, at the signing ceremony at its corporate headquarters in Shenzhen, Tan Sri Vincent Tan said that a joint venture with BYD offered huge opportunities for Malaysia.

“It will create many jobs and complement our existing vendors in Malaysia. A joint venture with BYD – it's F0 is already China's top selling car – holds much promise for Malaysia,” he said.