Xiaomi launches electric car and sees rush to stores – 04/07/2024 – Market

Two young Chinese professionals, heard about making a choice between Huawei and Xiaomi, on smartphones and now electric cars, were not reluctant. Huawei is for older people, Xiaomi is for them.

The reason is not only in the relatively low prices for the high technology offered, a characteristic of the company, but in the design and even the absence of nationalist weight. Huawei is more advanced and overcame the American siege, which tried to suffocate it by prohibiting access to chips and even the operating system.

But so much patriotism is also a burden for the brand, says one of the interviewees, who prefers not to have his name mentioned. Xiaomi, on the other hand, is as light as the appearance of its SU7 sedan. Presented just over a week ago in its store in the Hopson One shopping mall, which is not even the most luxurious in Beijing, it became a rage.

On the first day, of the 15 most popular hashtags on the social network Weibo, seven were linked to the brand.

Also on the first day, the SU7 exceeded 90,000 orders, when the factory in Yizhuang — an area focused on high-tech industry, south of Beijing — was only prepared to produce 5,000 per month. Now it is racing to reach 10,000 monthly, in response to demand.

Analyst and consultant Yilun Zhang, focused on the electric car sector, followed the rush to stores and notes that “neighboring competitors like Huawei’s Aito M7 attracted only a fraction of Xiaomi’s crowd, highlighting the stark difference in consumer attraction “.

A media outlet that covers the sector, CarFans China, raised the profile of visitors in the first days of the new car’s exhibition, until last weekend: 70% were men aged 25 to 35.

This track, he assessed, is influenced by online information and was attracted by the brand’s reputation and the “influence of Lei Jun”, co-founder and CEO of Xiaomi. He was the one who announced that he would make the car, almost three years ago, and now he presented it, saying that it is “so difficult, so difficult, that even Apple gave up”, referring to the recent abandonment of the electric vehicle project.

On Wednesday (3), he himself would have opened the door for the first to be delivered, for buyers to enter. Also active in marketing via Weibo, he announced that, at the same time, deliveries began in 28 cities across China.

With order confirmation already at around a third, according to Yilun, “managing its supply chain and production, to ensure that vehicles are delivered on time and with quality, is the next challenge for Lei.”

The rush to stores had curious effects, such as the car that completed its 800 kilometers of range in a single day, just with a “test drive”. And others that made headlines, such as the 16% jump in Xiaomi’s shares on the Hong Kong Stock Exchange on Tuesday (2), upon returning to post-launch operations, closing the day with an increase of 9%.

The starting price, of just 215,900 yuan (US$30,400 or R$154,200), also reactivated the price war in the Chinese electric car market.

The Huawei Changan Avatr 12 cut 35 thousand yuan the day after launch to 265.8 thousand yuan. Geely’s Zeekr 007 cut 20 thousand yuan to 209.9 thousand yuan.

The chosen price means losses, Lei publicly warned, crediting the reduction to the need to adapt to strong competition in the Chinese market. On the other hand, the company’s profit last year, with attention to more expensive smartphones, jumped almost seven times compared to 2022.

For Yilun, the successful launch of the Xiaomi SU7 shows “how important brand recognition is in China.” In this case, Xiaomi carries this advantage to other markets around the world, including eventually Brazil.

Headquartered in Beijing, Xiaomi was created in April 2010 by Lei Jun, who graduated in computer science from Wuhan University and had previously run the software company Kingsoft.

In addition to being one of the largest smartphone manufacturers in the world, Xiaomi produces everything from rice cookers to washing machines, electric scooters and headphones.

The products, starting with the smartphone, are digitally integrated, which now extends to the SU7 electric car. The company’s total revenue in 2023 reached 271 billion yuan (US$37.4 billion or R$190 billion).