BYD pushes 4 sub-brands toward self-financing as sales slide 20%

BYD is splitting its engineering academy into five brand-specific research institutes, giving each sub-brand control over product development and profit-and-loss responsibility for the first time.

BYD is making four of its five sub-brands responsible for their own profit and loss, a restructuring that shifts power from the company's centralized engineering academy to individual brand teams. Under the new mechanism, Dynasty, Ocean, Fang Cheng Bao and Denza will draw on group resources for research, production and procurement as needed, with costs settled independently. Yangwang, the ultra-luxury brand, is temporarily excluded from the plan.

"BYD will keep growing over the next three to five years," Wang Chuanfu, chairman of BYD, said at the annual shareholders' meeting on June 9. He projected the company could become the world's largest automaker by scale within five years.

The engineering academy will retain only technology platform development, with most personnel reassigned to the five brand research institutes, according to a report by Jipian Lab. The change breaks a long-standing tradition at BYD, where vehicle models were defined and developed uniformly by the central academy, which also held core technology resources including hybrid and pure-electric platforms and chassis.

The restructuring comes as BYD faces its first significant growth slowdown in years. Sales climbed from 427,000 units in 2020 to 4.27 million in 2024, but growth decelerated to 7.7% in 2025. In the first five months of 2026, the company sold 1.41 million vehicles, down 20% from a year earlier.

Centralized model shows its limits

BYD's founder-led approach once delivered significant advantages. Wang made long-cycle technology bets without short-term profit constraints, including 180 billion yuan ($26.6 billion) in cumulative research and development spending from 2008 to 2024. In 2019, when net profit was just 1.6 billion yuan, the company spent 5.6 billion yuan on R&D. That discipline produced breakthroughs such as the Blade battery and in-house IGBT chips, the latter stemming from BYD's 2008 acquisition of bankrupt Ningbo Zhongwei Semiconductor for 170 million yuan.

But as BYD expanded to operate multiple sub-brands targeting different price points and customer segments, the limits of the centralized model emerged. Denza, Fang Cheng Bao and Yangwang require distinct product definitions, design languages and channel strategies, yet the development inertia of emphasizing technology leadership tended to worsen homogenization across brands.

Fang Cheng Bao illustrates the tension. The brand entered the market with rugged off-roaders, but after the Bao 5's performance fell short of expectations, it cut prices and introduced the more mainstream Tai series, drifting from its original "premium personalized" positioning toward the mass market.

BYD is not alone in rethinking its structure. Geely Auto, after announcing its Taizhou Declaration in 2024, shifted from a fragmented approach to a centralized model, setting up a unified central research institute while establishing separate vehicle research institutes for Lynk & Co, Zeekr and others — a logic that closely mirrors BYD's current adjustment.

BYD shares fell 4% on June 18, with short selling reaching $434 million, or 17.3% of total turnover, showing investor caution about near-term disruption. The restructuring could improve cost allocation and brand accountability over time, but the 20% sales decline in 2026 suggests the company faces immediate demand challenges. Wang's five-year target of becoming the world's largest automaker will depend on whether the new structure can reverse the sales trend without sacrificing the R&D intensity that built BYD's technological edge.

This article is for informational purposes only and does not constitute investment advice.