BYD and Absa’s launch of BYD Finance is more than a branded vehicle finance arrangement. For Absa, it is part of a broader attempt to rethink how South Africans buy, use and support new-energy vehicles.
Fulufhelo Mandane, Executive for Business Development and Strategic Partnerships at Absa, says the bank’s confidence in the partnership was not immediate, but developed through a deeper understanding of BYD’s global strategy and its approach to customers.
“There’s a few exciting lessons that we had to learn as a business,” Fulufhelo says. “Like any other financial institution in the beginning, we were also not sure on where this electric vehicle (EV) era is going to.”
That uncertainty began to shift as Absa engaged more closely with BYD. “The one thing that we relied on was the fact that we are a partnership business,” he says. Through those discussions, Absa began to see that attractive financing could be built if “there is a strong partner in place”.
He says BYD’s thinking around long-term customer value was particularly important. “The one thing that really got into my mind was the fact that they were very worried about the used car side.” BYD, he adds, was asking “how best can we manage the depreciation curve”, which signalled to Absa that the company was “concerned not only about selling cars, but also about the customer”.
The launch comes at a time when affordability remains one of the biggest obstacles to electric vehicle adoption in South Africa. Fulufhelo says BYD Finance is intended to address that by looking beyond the monthly repayment.
“We’re looking at the full end-to-end value of ownership of the vehicle beyond just the asset itself,” he says. “With EVs, there’s a lot of additional stuff that you need to think of.”
That includes home charging infrastructure, insurance, servicing, maintenance and, potentially, energy solutions such as solar panels and inverters. Fulufhelo says customers should not have to arrange these elements separately.
“If you buy an EV, you might be very keen to keep this. You are a very environmentally friendly person. You might want a solar panel and an inverter at home,” he says. “You don’t have to do that separately. It’s part of the deal.”
He uses the BYD Shark as an example of how vehicle use is changing. “For some customers it’s a lifestyle thing,” he says. “When you finance a BYD Shark, for example, you can go camping and plug in your lights and fridge and stuff. How do we cover that as part of the finance?”
For Absa, this means developing finance products that match the realities of new-energy vehicle ownership. “How are you going to charge? Do you want to use Eskom or do you want to use your solar?” he asks.
The relationship between Absa and BYD has also been built over several years. Fulufhelo says Absa spent significant time in China to understand BYD as a manufacturer and to study BYD Finance and BYD Insurance there. “There was at some stage where we were going to China twice a year,” he says.
Those visits helped Absa become more comfortable with the risks involved in financing new technologies. “Coming back from that, that’s when we realised that maybe there’s nothing here to really worry about when it comes to risk, future value, et cetera, because these are good cars,” he says.
He adds that Absa’s role is not only to finance vehicles, but also to protect customers from unsuitable structures. “We are also worried about the end user, which is a customer, making sure that we don’t get the customer into a financial structure they can’t get out of.”
Looking ahead, Fulufhelo says the partnership’s success will be measured against BYD’s ambitions in South Africa. “BYD wants to be number one,” he says. “We want to be the bank that banks BYD to be number one.”
The next phase may involve finance models that reflect changing attitudes to vehicle ownership. He says Absa is already considering customers “that do not want to own vehicles for too long” and others who “don’t want to own a vehicle at all. We’re looking at the subscription financing options as well for customers”.
While Absa remains open to similar partnerships with other new-energy vehicle brands, Fulufhelo says the bank is not chasing volume for its own sake. “It’s not a matter of how many partnerships we want. It’s more of getting the right match kind of partner that we can grow with.”
For now, BYD Finance represents that match, and a sign that vehicle finance in South Africa is beginning to adapt to the EV era.
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Cars are the ultimate symbol of freedom, independence and individualism. They offer the freedom to ‘go anywhere,’ whenever it suits and with whom one chooses.
Sarah Redshaw
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The row over BMW’s Spider-Man promotion is not really about superheroes. It is about trust, control and the creeping feeling that modern cars are becoming digital platforms first and private possessions second.
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