Copying Competitors Turns Out to be Poor Business Strategy for a Chinese Carmaker

Posted on September 4, 2012 by Simon

A recent article from Want China Times highlighted the immaturity of one Chinese car manufacturer, which may not be atypical of the Chinese auto industry – and perhaps other industries in China. BYD, which is one of China’s emerging domestic auto brands, is in financial trouble as a result of various poor business decisions. One of these decisions was to copy other carmakers’ products rather than create original designs.

From a designer’s perspective, it’s interesting that the topic of copying competitors is so casually discussed as a legitimate business strategy. There is no mention of the ethical concerns of the approach – only of the financial impacts. Regardless of ethics, however, BYD’s strategy of copying competitors’ products has resulted in a dramatic loss of marketshare. As the article states, “this approach undermined the company’s research-and-development abilities, subjecting it to great pressure each time other Chinese carmakers launched new models.” Some of BYD’s domestic competitors, meanwhile, have made investments in R&D centers and hiring experienced foreign designers.

Read the full story from Want China Times.