This week's Bloomberg Business Week contains the results of their annual "Most Innovative Company" survey, conducted in cooperation with Boston Consulting Group. (A sortable list of the top 50 can be found here.)
The number eight company on this list this year was a bit of a surprise to me: BYD, the automaker from Shenzhen. While it doesn't surprise me at all that the number of Chinese companies on this list should increase (from only one last year to four this year), I was shocked to see BYD at number eight -- with a bullet -- and ahead of the likes of GE, Sony, Samsung and Intel.
Among auto companies, only Toyota ranks above BYD at number five. (The survey was conducted last December before the extent of Toyota's current woes became known.) Behind BYD are Ford (13), VW (15), Tata (17 - also a bit of a surprise from the Indian automaker), BMW (18), Hyundai (22), Honda (26) and Fiat (43).
So why should BYD be ranked so highly its first time on this list? Is it because BYD makes the highest selling sedan in China? Hardly. The F3, though a hot seller, is basically a copy of a Toyota Corolla. And based on feedback from a number of auto journalists, a very poor copy at that. In all fairness, however, those same journalists credit BYD for great improvement since it entered the car business in 2003.
The BYD F3
The Toyota Corolla (2008)
Is it because BYD is the leading Chinese manufacturer of electric and hybrid vehicles? Perhaps. The plug-in hybrid version of the F3 (the F3DM) was announced to much fanfare back in December of 2008 as the world's first production plug-in hybrid. BYD had beaten the Japanese, the Americans and the Europeans to market. The only problem was, no one could actually buy one.
As of last August, only a few hundred had been sold, and only to fleet purchasers such as the local government of Shenzhen. Supposedly, consumers are finally, as of this month, able to buy the F3DM, but as even Business Week admits, it comes with a $24,900 pricetag. The regular version of the F3 only goes for about $9,000. (Why buy a Corolla for $19K when you can get a look-alike for $9K? Why buy a look alike-hybrid for $25K when you can get the real thing for $19K?)
And even if Chinese consumers had been able to buy the F3DM as early as December 2008, how exactly is a plug-in hybrid innovative? The Toyota Prius, a hybrid of the non-plug-in variety has been available in Japan since 1999. And nearly every car company in the world now has some variety of electric and/or plug-in hybrid in the works, most using the same lithium-ion battery technology.
I am not saying that BYD is not an innovative company. In fact, from what I have learned talking to current and former BYD employees, the company's internal philosophy is all about innovation -- learning, experimenting, finding new ways to do things. And it is because of this that I really want to see BYD succeed in its mission. What I am saying, however, is that, for all their innovative talk, they have still produced very little beyond a hot-selling copy of a gasoline car and a hybrid version that is still untested by the driving public.
Isn't ranking BYD high on a list of innovators sort of like handing out a Nobel Peace Prize to someone because he talks a lot about peace? Let us hope that both peacemakers, and innovative carmakers, can live up to their reputations.