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5 Questions With BYD Chairman

Wang Chuan Fu, Founder and Chairman of Chinese car and battery maker BYD, tells CNBC how he is charging up the Buffett-backed company for the future.

Q: What made you start BYD, which is China's largest battery maker today?

A: It was around 1995 after China had liberalized its economy, and it was vibrant. Many people wanted to be entrepreneurs and venture into business in China. That was the trend at the time, and that's why we joined this entrepreneurial wave.

Wang Chuan-Fu, the Chairman and President of BYD, Berkshire Hathaway CEO Warren E. Buffett, Vice-Chairman Charles Munger and Bill Gates, founder of Microsoft, attend a new product launching conference of BYD at China World Hotel on September 29, 2010 in Beijing, China.
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Wang Chuan-Fu, the Chairman and President of BYD, Berkshire Hathaway CEO Warren E. Buffett, Vice-Chairman Charles Munger and Bill Gates, founder of Microsoft, attend a new product launching conference of BYD at China World Hotel on September 29, 2010 in Beijing, China.

Q: You ventured into the auto business in 2003, with little knowledge about making cars. Why the bold move?

A: Yes, it's true that we didn't know much about cars back then and had very little research done on cars. But we saw opportunities in the future, especially in China. As petrol was set to create an (environmental) problem, we needed to start developing electric cars. The future of electric cars in China is very bright.

We see that this is the right direction to venture in, so we decided on this and bought an automobile company. But in the short term, we are still focusing on gasoline-powered cars in the market and we've been successful.

Last year, we hit 450,000 cars. As demand for electric cars in China and the world grows, this component of our business has also seen encouraging results.

Q: What do you tell skeptics who say electric cars won't take off?

A: I think it is precisely the opposite. I think the confidence in electric cars has strengthened increasingly. Looking at our 50 "E6" electric taxis in Shenzhen, questions of whether batteries could power electric cars have more or less been eliminated. That's because some of these taxis have traveled 40 thousand kilometers. That's equivalent to a normal sedan traveling for two years. The dream and the era of the electric car is upon us.

Invest China - A CNBC Special Report
Invest China - A CNBC Special Report

Q: How do you ensure quality in your factories?

Q: We know the greatest threat to quality are the variables along the production line. Fighting the variables is the direction we're taking. We have a competitive labor force, and we make use of this quality labor force to exercise quality control, to analyze the variables. With manpower and automation, quality control is held to a high level of excellence. This is the method we use. When labor costs in China increase, we will also gradually bring in more automated machines to reduce our reliance on people, and also to cut costs.

Q: What drives you, what motivates you?

A: I think it stems from a curiosity. When we see something good, we wonder how come it's so good, and we want to find out why and how it's created, to find the root cause of its goodness.

BYD, China's largest battery maker, shot to fame when Warren Buffett's Berkshire Hathaway bought a stake in the firm. It now holds a 10 percent stake.

Contact Invest China - Special Report

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