Chinese rival violates Selling 101, Rule 1

 

Benz knockoff

Not a Benz, silly. It’s a BYD.

Good car salespeople resist the temptation to disparage the competition. It accomplishes two things, both bad: It makes you look like a lowbrow rookie, and makes the customer MORE interested in the fruit you’re forbidding. So on a larger scale, it’s a bad idea for an automaker to diss another. Yet that’s exactly what the CEO of Chinese automaker BYD did with Tesla. By calling the Model S a “rich man’s toy,” BYD’s chief Wang Chuanfu set the tone for BYD’s salespeople. Surely they’ll repeat the CEO’s mantra in showrooms. This is good news for Tesla, which has priced the Model S in China identically to the US model excepting tariffs etc. That’s unheard-of. Usually automakers boost Chinese pricing simply because they can. So when you couple Tesla’s lowball pricing with lowbrow competition, what do you get? A chance to buy a rich man’s toy on the cheap. This helps the Tesla scale in China:

Advantage, Tesla:

  • It’s made in America. Even China doesn’t like “Made in China.”
  • It’s high-end. China likes frontin’, as evidenced by its infamous luxury-car knockoffs.
  • The same attributes helping it in the US (crashworthiness, performance, tech showcase).

Advantage, BYD:

  • Tax credits for buyers.
  • Anyone can buy a BYD, while Tesla is lumped with gas cars in Beijing’s car-rationing lottery intended to ease pollution.
  • Lower price.
  • Backed by Warren Buffett, the rich guy whose name nobody can spell correctly.

Tesla’s foes in the US are going a step beyond dissing. They’re banning! That’s even better. Banning a product is the ultimate endorsement and instantly provides rocket fuel to its allure. Think of some outlawed movies, videos, music, advertisements etc. over the years. If you weren’t interested before the ban, you were interested afterward and surely found a way around the ban. Tesla’s Q2 report will show the fruits of these high-profile battles as fence-sitters vote with their wallets.

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