BYD and Chery are formulating expansion strategies after Canada opened its doors to Chinese automakers. The starting point of their operation is the Greater Toronto Area.
Canada recently relaxed its tariff structure for Chinese electric vehicles, allowing them to enter the country at a revised duty rate of just 6.1%. This allows brands such as BYD and Chery effortless access. However, they are only allowed to bring in a fixed 24,500 Chinese-made EVs under the quota.
That is still enough for both brands to start a business through a clever dealership network. A report by Carscoops stated that both brands are planning to establish independent dealerships. However, whether the brands can sustain multiple dealerships under a limited vehicle quota is something that is yet to be ascertained.
For now, the plan involves establishing dealerships in the Greater Toronto Area and then expanding east and westward to cities like Montreal, Calgary, and Vancouver. Sources claim that BYD is aiming to build 20 dealerships in the first year of its operation in Canada.
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Farid Ahmad, CEO of Dealer Solutions Mergers & Acquisitions, a consultancy that has already had discussions with three possible BYD locations, told The Globe And Mail:
“They’ve asked us to help them find as many of the 20 that they possibly can, but they’re out there doing that themselves, as well.”
“We have been engaged with a number of Chinese manufacturers that are looking to establish their dealer network here in Canada.”
Will Chinese EVs Enter The U.S. Market This Year?
Chinese automakers are working to expand their operations on a global level, to eventually enter the U.S. market. Although they are not permitted to enter the country at this stage due to cybersecurity laws that prohibit sales of Chinese EVs, the rules could be relaxed in the future.
BYD has not revealed an official launch date for its Canadian operations, but it is expected that, together with Chery, it will intensify competition in the automotive industry, which is being dominated by North American, South Korean, and European brands.
MotorBiscuit reported how another Chinese EV manufacturer, Xpeng, is gearing up to launch its vehicles in Mexico at the end of this month. Now with BYD and Chery entering Canada, the trend highlights increasing competition from Chinese EVs right here in the United States’ backyard.
