BYD: Low-key return to LED lighting

[Source: "High - tech LED - Research and Review" December issue reporter / Tang Guirong ]

“The sales of LED lighting this year is only 150 million yuan, of which one-third is from the internal digestion of the group, mainly in the two major businesses of automotive lighting and mobile phone backlighting; the other two-thirds are from indoor and outdoor lighting.” Recently held During the 2012 Gaogong LED Annual CEO Conference, Chen Gang, the general manager of BYD's sixth business unit and seventh business unit, accepted an exclusive interview with “High-tech LED”. In his view, despite the sales scale of nearly 50 billion yuan, the LED business revenue is only a drop in the ocean, but it carries the responsibility of BYD to establish a new energy brand.

2012 is an internal adjustment year for the BYD Group. Due to the slowdown in the growth of the Group's automotive business, BYD's new energy strategy has also changed from a rapid expansion to a conservative contraction. This is also directly reflected in the expansion of LED lighting business as one of the new energy businesses.

In contrast to the high-profile layout of LED lighting in 2011, BYD's LED lighting strategy appeared to be somewhat low-key in 2012, and brand promotion including channel layout and marketing promotion was tightening accordingly.

“We originally planned to do market layout in the country. Starting this year, we will select the top ten provinces and cities that the group has invested in to carry out key layouts.” Chen Gang said that because the LED lighting market has changed too fast, it has been rapidly developed by Blue Ocean in just two years. Become the Red Sea. "In the future, our investment in LED lighting will not be too great, but the plan to undertake BYD's new energy brand has not changed."

In Chen Gang's view, LED lighting is the second largest independent brand of BYD.

Under the background of the industry's melee, whether LED lighting can carry the hope of BYD's new energy brand strategy may still be waiting to be seen.

Industry ups and downs

In 2010, BYD invested 1.2 billion yuan in Huizhou, ordered 10 MOCVD, and laid out the entire LED industry chain. "BYD has invested heavily in LED upstream, and its posture is high-profile. It was also a heavy news in the industry at the time." Recalling the situation at the time, an insider still felt a lot of emotion.

Since then, BYD has frequently appeared in relevant media, exhibitions and terminal markets.

The reporter learned that in 2011 BYD participated in more than 10 LED exhibitions in China, and took the lead in entering large domestic supermarkets, such as Wal-Mart, Shundian and other physical stores, as well as E-commerce platforms such as Jingdong and Tesco.

"This is a big way to lay out the LED lighting market. BYD was still the first one." Chen Gang said.

According to a person familiar with the matter, BYD is so active in the LED lighting market, on the one hand, it values ​​the development prospects of the LED lighting industry; on the other hand, new energy, especially LED concept stocks, is very hot, and many companies involved in this field are involved. The stock has turned at least five times.

However, the LED lighting market is not as good as BYD. In 2011, BYD, which entered the LED industry with high-profile, suffered a crazy LED investment boom, and a large amount of capital poured into the LED industry. "The number of LED lighting companies is growing at a very fast rate. The LED lighting market, which was originally considered to have high interest rates and high output value, has become extremely chaotic in an instant."

Data show that in 2011 BYD lighting revenue was only 100 million yuan, far lower than previously expected. What is even more cruel is that due to the slowdown in global economic growth, the main business of BYD was hit hard. In 2011, BYD's total operating revenue increased slightly by 0.8% year-on-year to 46.312 billion yuan, but its net profit dropped 45.1% to 1.385 billion yuan.

“Unfortunately, the group had to adjust its strategy, slow down its investment in new energy, and concentrate on its main business,” said a person close to BYD’s top management.

"2012 belongs to the group's internal adjustment year, and all aspects of market promotion are relatively passive. Due to cost control, whether it is a car or a new energy source, BYD has not done much publicity." Chen Gang said.

In fact, not only BYD, TCL, Great Wall Computer and other industry predators who once invested in LED lighting business, but also once the main business shrinks, slowing down the development of this market.

The data shows that BYD's financial report for the first three quarters of 2012 showed that the Group achieved operating revenue of approximately RMB 33.1 billion, a decrease of 3.57% year-on-year; net profit was RMB 20.88 million, representing a year-on-year decrease of 94.08%.