Research On The Motivation And Effect Of BYD Diversification

Since the founding of the People’s Republic of China 70 years ago,my country’s manufacturing industry has developed vigorously.Especially since the reform and opening up in 1978,my country’s manufacturing industry has not only achieved leap-forward growth in types and quantity,but also provided strength for strengthening the country’s hard power and improving its international status.However,compared with the world’s advanced level,China’s manufacturing industry is large but not strong.There are obvious gaps in independent innovation capability,resource utilization efficiency,industrial structure level,information technology level,quality and efficiency,etc.The task of transformation,upgrading and leapfrog development is urgent and arduous.In 2015,the State Council issued "Made in China2025",which will comprehensively promote the implementation of the position of a manufacturing powerhouse as a national action plan.A strong manufacturing industry is the only way to achieve national prosperity and national prosperity.Manufacturing industry is also indispensable in international market competition.It is driven by innovation and pay much attention to quality;It persists in green development,structural optimization and talent-oriented manufacturing.Our country’s automobile manufacturing industry started in the 1950 s,and compared with foreign automobile manufacturing industries,it started late and developed rapidly.In recent years,our country has actively promoted the development of the entire automobile industry chain,especially the policy for new energy vehicles has become more and more complete.In addition,in terms of opening up,in 2019,the Ministry of Industry and Information Technology emphasized the need to fully implement the timetable and road map of China’s auto industry at the opening ceremony of the World Intelligent Network Automobile Conference,and improve the international exchange and cooperation mechanism.With the opening up of the automobile industry and the new energy vehicle subsidy policy of "supporting the good and strong",the competition in the automobile manufacturing market will further intensify,which may have a certain impact on domestic automobile manufacturers.As China’s first enterprise to enter the field of new energy vehicles through diversified operations,BYD’s diversified operations and effects are of great research significance.This article conducts a comprehensive analysis of BYD’s operating performance.This paper makes a comprehensive analysis of BYD’s business performance.Firstly,based on the traditional financial indicators,it makes a vertical and horizontal analysis of BYD’s financial performance by implementing the diversification strategy.Secondly,it analyzes the impact of diversification on its non-financial performance.In addition,the 5-year EVA of BYD is calculated to take the impact of equity cost into account,so as to make the performance evaluation more accurate.Finally,based on a series of analysis results,the problems existing in BYD’s diversification process are put forward,including:(1)The solvency still needs to be improved;(2)The diversification process is slightly faster,which increases the operating burden;(3)R&D efficiency is reduced.Corresponding optimization suggestions are put forward in response to the above problems:(1)Improve the account receivable credit mechanism and increase debt solvency;(2)Carefully select diversified industries to reduce operating burdens;(3)Establish R&D supervision institutions to improve R&D efficiency.