A model poses next to an M6, a car by Chinese automaker BYD Auto, during the 10th China International Automobile Exhibition in Guangzhou on Nov 22. Tyrone Siu / Reuters

One man has found his ultimate energy charge in the southern city

Welcome to paradise on Earth. At least, that is the way Isbrand Ho sees it.

For Ho, general manager of the auto export trade division of BYD Auto Co Ltd, Shenzhen gets that top billing not just because he feels it is a hallowed place for his company, but because he sees it is a haven for the good guys of the world: companies that want to innovate.

"Shenzhen is a very advanced thinking area in China," says Ho.

"A lot of new product ideas and breakthroughs start here in Shenzhen. It is one of the most favorable places for the growth of many innovative companies, similar to Silicon Valley in the US."

BYD's growth has paralleled the city's reform and opening-up, he says.

"Without the support of Shenzhen, BYD would not be where it is today."

Ho, speaking in the group's sprawling headquarters covering almost two square kilometers in Pingshan district, says that because the electric-vehicle industry is so new, those in it need boldness, determination and support from the government.

He recalls that when BYD started developing electric buses, one of the recurring questions was whether they could be safe, a challenge that put the industry's best minds to the test.

The city government had become well aware of the advantages of saving energy and protecting the environment and it offered great support to the industry, providing subsidies and acquiring electric vehicles for shuttling government officials around.

One of the most prominent examples is when Wang Rong, the city's Party secretary, declared in January that he would be using BYD's E6 as his official car, giving up his Audi A6.

"That's great support," Ho says. "The government sees the advantage of electric vehicles in saving fuel and in having zero emissions. They have been very proactive with the local bus brand."

Born in Hong Kong and raised in the United States, Ho came to Shenzhen in 1986 when it was just a fishing village.

"Over the last couple of decades the city has changed dramatically. Because it was the first national special economic zone, the city government worked in a highly pragmatic and efficient way. It took the lead in reform and opening-up and has become a seasoned business manager. There is no other city government in China that encourages innovation as much as Shenzhen does."

Since BYD was founded in Shenzhen in 1995 it has become the largest electric vehicle maker by sales in China. It employs about 170,000 employees worldwide, and its products are sold to more than 60 countries and regions.

Even with the backdrop of a global economic downturn, the group had turnover of about 48.7 billion yuan ($7.8 billion, 6.2 billion euros) last year, about 4 percent less than the year before. Profit was 81.4 million yuan, declining by 94 percent less than the previous year, the company says. However, it has forecast a strong recovery in the first quarter of this year.

Undeterred by the economic malaise, Ho says the international market will eventually rebound, and he sees great potential for electric vehicles in the long term.

"The international market is very important for us and we will give its development a boost by relying on Shenzhen's favorable conditions."

Jia Xinguang, an independent auto analyst in Beijing, says that because of overcapacity in the Chinese auto market, it is understandable that the country's carmakers are casting their eyes over overseas markets.

"The auto competition in China is like a global war, and getting more market share overseas is crucial for the domestic players."

Looking to draw further on the overseas market, BYD does not exclude the possibility of conducting overseas mergers and acquisitions.

In December it signed a joint venture agreement with a Bulgarian company to jointly produce electric buses there.

"We will continue to have this kind of joint venture partnership in Europe this year, focusing on making electric and green vehicles," Ho says.

Europe greatly appeals to BYD, he says.

"In Europe, the electric vehicle market is huge. Total demand for buses alone is close to 30,000 a year, of which 10,000 are city buses, typically for ranges from 100 km to 200 km a day. That's ideal for solving environmental problems."

Last month 50 BYD E6 models, for use as taxis, were delivered to London, the aim being to have them in use by the second quarter of this year.

"In the past two months we have had orders from Europe as well. I am sure that if the economy in Europe improves, we will see more."

But there are still challenges in developing electric vehicles, Ho says. The first of these is consumer resistance in the face of what is perceived to be the narrow range of cars available.

"For many people the first response regarding electric vehicles is, 'Oh my god, what if I can't recharge the car and get home?' There is now even a name for it: range anxiety."

As the industry develops, recharging stations are springing up across the country, and with a critical mass, demand for electric vehicles will take off, he says.

"Just think about it - a hundred years ago, people would have had the same worry because there were no petrol stations every 2 km."

The company has already come up with models aimed at tackling the problem of range anxiety, Ho says.

Recharging stations have little public support now, and governments need to step in and help build them, he says.

"A lot of countries, such as Britain, have set up charging points, and legislation dealing with them is in place."

The Shenzhen government has done its bit in this regard by setting up some charging points across the city, he says.

"To further promote the industry's growth nationwide, more backing is needed from the central government to build the charging system in a coordinated way."

Next year the company aims to produce 2,000 electric buses and 6,000 electric taxis across the world, he says. By 2015, the projection is for 500,000 electric cars to be in service.

To be successful in the automobile industry, two important things are needed, Hao says: technology and passion.

"Technology is related to innovation and quality. But to do well in the automobile business you also need passion. Working in BYD and in Shenzhen, I'm able to stimulate my passion and bring all of my potential into play."

Contact the writers at huhaiyan@chinadaily.com.cn and chenhong@chinadaily.com.cn

(China Daily 04/12/2013 page18)