2024-07-21
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source|Tech Planet
arts|Wang Lin Ren Xueyun
No one expected that the Xiaomi Mi SU7, for which Lei Jun staked all his reputation and achievements and worked hard for thousands of days and nights, would replicate the miracle of the Xiaomi mobile phone from the very beginning.
In less than 40 days since the Xiaomi SU7 was launched on March 28, the number of Xiaomi SU7 orders has exceeded 100,000 units, while the sales volume of the Xiaomi SU7 in the whole year after its launch was only 75,000 units. Official data shows that as of June 15, the cumulative delivery of Xiaomi SU7 has exceeded 20,000 units, and the monthly delivery in June exceeded 10,000 units.
Among the new car manufacturers, only Ideal Auto has achieved over 10,000 deliveries of a single model. The difference is that Ideal took 1 year, while Xiaomi Auto only took 3 months.
In the past three months, in order to let consumers better understand Xiaomi SU7, Lei Jun drove Xiaomi SU7 to multiple Xiaomi car delivery centers in Shanghai, Hangzhou, Nanjing, Wuxi and other places in the form of live broadcast.
From March 20, when the SU7 launch conference started, nearly 90 of the 125 short videos posted by Lei Jun's Douyin account were related to Xiaomi SU7. After the launch of SU7, executives of Xiaomi Group also began to join Douyin and other social platforms, and Lei Jun's personal Douyin account fans soared by nearly 100,000 per day. In the 112 days since Xiaomi Motors was launched, SU7 has completed the major test in stages.
However, Xiaomi Auto has not been smooth sailing under the huge traffic. It faces the same problems as all car companies. In the past 112 days, Xiaomi Auto has faced many challenges such as delivery, after-sales guarantee, product quality, and sales channel construction. Consumers seem to be examining everything about Xiaomi SU7 with a magnifying glass.
After three years of car manufacturing, Xiaomi Group has been recruiting everywhere. The car team has received 380,000 resumes and now has 7,000 people. Lei Jun personally participated in every key node of Xiaomi Auto. On July 19, Lei Jun recounted the various efforts made by the team to build Xiaomi SU7 in his 2024 annual speech and responded to many doubts from the outside world.
Caption: Lei Jun's 2024 annual speech on July 19. (Photo taken by Tech Planet)
However, there are no players who don’t work hard in the auto market, and no new car can be loved by everyone. Challenges are the norm. In the 112 days since SU7 was launched, Xiaomi Auto has truly witnessed the cruel competition in the auto industry.
Xiaomi SU7 wants to break the record in the automotive industry. Lei Jun revealed in his 2024 annual speech that at the beginning, the order target for Xiaomi SU7 was set at 76,000 units, but two months after its launch, in May 2024, Xiaomi SU7 adjusted its delivery target: 100,000 units will be delivered this year, and 120,000 units will be strived for. This is unique in the automotive industry. It took the new car-making forces "Wei, Xiao, and Li Auto" about three years to achieve this goal, and Xiaomi plans to achieve it in three quarters.
Caption: Lei Jun gave his 2024 annual speech on July 19. (Photo taken by Tech Planet)
Official data shows that as of June 15, the cumulative delivery of Xiaomi SU7 exceeded 20,000 units, which is 100,000 units away from its sprint goal. In other words, in order to achieve the goal, Xiaomi Auto's monthly production must be increased to 15,000 units. To this end, Xiaomi Auto is stepping up its production capacity.
A Xiaomi automotive supplier told Tech Planet that it takes two years for Xiaomi to develop and mass produce a project like this. Now, they are working overtime. "We originally agreed to receive 10,000 orders this month, but now it has doubled to 20,000. If we can't complete it, we have to work overtime."
A supplier of Xiaomi's automotive interiors told Tech Planet that their daily output was 160 pieces at the beginning, which increased to 210 pieces in mid-May, and now it has increased to 280 pieces. "For Xiaomi, our factory has been working very hard."
According to official statements, Xiaomi's automobile factory can produce a car every 76 seconds, 40 cars per hour, and about 320 cars can be produced in 8 hours. Most factories do not have weekends off, and can produce 9,600 cars per month.
Xiaomi's auto factory started a two-shift mode in June, working 16 hours a day, and can produce nearly 20,000 units a month. But in the past June, Xiaomi's auto delivery just exceeded 10,000 units.
Suppliers are working at full capacity, which has greatly improved the reliability of delivery, but this is not enough. Because the supply chain is more like a systematic project that needs to be constantly adjusted. "Each process must be coordinated, and there is a matching problem in the middle. For example, if the front is fast, the back is slow. Xiaomi's situation is more like a lack of coordination," said an employee of a new energy vehicle.
Most of the production lines of mature domestic automakers, such as Great Wall Motors, run 24 hours a day. Once they stop, the losses are huge. Xiaomi Auto can only run 16 hours at present. Xiaomi Group has always been considered to have strong supply chain management capabilities. As a newcomer in the automotive industry, Xiaomi Auto's performance is not inferior, but compared with outstanding players in the automotive industry, Xiaomi still has a lot of room for improvement.
The sales ranking of new car-making brands in the Chinese market in June showed that Ideal Auto, Hongmeng Intelligent Driving, and GAC Aion took the top three places in sales that month, with deliveries of 47,774, 46,141, and 35,027 vehicles, respectively.
Among them, Zeekr Auto, a direct competitor of Xiaomi SU7, set a new record in June deliveries, delivering 20,106 vehicles, a year-on-year increase of 89%. From January to June, Zeekr delivered a total of 87,870 units, a year-on-year increase of 106%, more than doubling the same period last year. Xiaomi did not disclose specific figures, only saying that it delivered more than 10,000 vehicles.
Judging from the actual delivery situation, Xiaomi SU7 still faces challenges in delivery capacity among similar new car manufacturers. "If the production capacity cannot be delivered, it will affect the sales at the front end," said a manufacturing director of a new energy vehicle factory. According to Xiaomi's sales department, Xiaomi has already locked in more than 110,000 orders.
From a long-term perspective, after streamlining the supply chain, increasing production capacity will still be the key to SU7's success.
Xiaomi Automobile Phase II project is also the key to "continuously increasing production capacity".
Xiaomi Auto Phase II is located in Fangxindian Village and Xiaozhangwan Village in Beijing Yizhuang New Town. According to the plan, the construction of Xiaomi Auto Phase II will start in 2024 and be completed in 2025. In June this year, Tech Planet visited the site and learned that the ground buildings of Xiaomi Auto Phase II have been demolished and are about to enter the construction stage.
The planned annual production capacity of Xiaomi Auto Phase II is 150,000 vehicles, and the combined production capacity of the two phases is up to 300,000 vehicles. However, compared with Ideal Auto, Xiaomi's production capacity still needs to be improved. Data shows that Ideal Auto's three factories in Changzhou and Beijing currently have an annual production capacity of 800,000 vehicles.
First-line sales outlets are often one of the main ways for car companies to reach consumers, and Xiaomi Auto is no exception.
On March 25, the first batch of Xiaomi Auto stores across the country officially opened, exhibiting the SU7 model, covering 29 cities, 59 stores and 17 limited-time showrooms across the country, a total of 76 stores.
With the launch of SU7, Xiaomi Auto has put the expansion of offline stores on the agenda since the end of March.
According to the second batch of candidate cities for Xiaomi Auto delivery centers announced by Lei Jun earlier, second-tier cities are the main ones, including Nantong, Changzhou, Jinan, Zhuhai, Nanning, Baoding, Wuhu, Guiyang, Changchun, Harbin, Hohhot, Urumqi, Lanzhou, Lhasa and other 20 cities.
According to the information released on Lei Jun's WeChat official account, by the end of 2024, Xiaomi Auto's sales network is expected to cover 39 cities, with 211 sales outlets; the service network is expected to cover 56 cities, with a total of 112 service centers.
According to the latest store opening progress announced by Xiaomi Auto, 17 new stores were added in June, and the number of stores nationwide has now reached 87, covering 34 cities. In the July store opening plan, Xiaomi officials said that they expect to add 17 stores, of which Jinan, Changzhou, Changchun and Guiyang are new cities.
Judging from the speed of store expansion, Xiaomi Auto is accelerating its pace. An auto dealer revealed to Tech Planet that Xiaomi's store expansion is not only to improve delivery speed and quality, but also to lay new channels for subsequent models. In addition, he also mentioned that Xiaomi's new stores are mainly dealer stores.
However, while the number of stores has increased, the popularity of Xiaomi Auto stores has been cooling down since it was launched in late March, more than 100 days ago.
A salesperson at a Xiaomi Auto store in Guangdong said that compared to the daily customer traffic of 10,000 people when the car was first launched, the store's customer traffic has returned to normal since May. The salesperson also said that because Xiaomi has only launched one car, consumers do not stay in the store for long.
Tech Planet visited the Xiaomi Auto store in Beijing Joy City and also found that compared with the popularity when Xiaomi SU7 was first launched, the customer flow of Xiaomi Auto store in July has shown a significant decline.
A salesperson said that since May, they have proactively made appointments for test drives for consumers who have registered before. "On weekdays, there are usually no more than 10 groups of test drives, and there will be slightly more on weekends."
For car companies, the golden 72 hours after listing is the peak of traffic and orders. The cooling of traffic of Xiaomi Auto is not an isolated case in the industry. But after the traffic returned to normal, the front-line sales of Xiaomi Auto gradually felt the pressure from the competition of peers.
The above salesperson told Tech Planet that due to production capacity issues, many customers have left and chosen other brands. A car owner in Jiangxi said that he locked the order on March 31, and so far, the status of his vehicle is still shown as being in production. The salesperson explained that the delivery cycle of each car will be different depending on the personalized configuration.
Tech Planet checked the Xiaomi Auto APP and found that the shortest delivery cycle of the three versions was 20 to 23 weeks, and the longest was 28 to 31 weeks.
Although the delivery cycle has been shortened compared to 29 to 36 weeks in May, based on the number of locked orders and production capacity announced by Xiaomi, subsequent car buyers may have to wait until next year to pick up the car even if they place an order now.
Benefiting from the user mentality of new energy vehicles cultivated by car companies such as Tesla and BYD, as well as the powerful IP effect of Lei Jun himself, the late Xiaomi Auto has had a good start.
The price range targeted by Xiaomi SU7 is exactly the one with the most intense competition. After the new car was released, a competition to block Xiaomi SU7 kicked off.
If you want to "cut in", you can buy any model of Zhijie S7 and pay the balance to directly deduct the 5,000 yuan non-refundable deposit of Xiaomi SU7 from the price of the car. With the same mobile phone number, you can buy a NIO car with a Xiaomi car order, including production information, and you can deduct 5,000 yuan after picking up the car. Consumers who have placed an order for Xiaomi SU7 can also receive a 5,000 yuan subsidy if they choose Ideal L6.
The automobile price war continues to intensify, with price cuts and frequently adjusted discount strategies irritating consumers.
Xiaomi Auto Sales told Tech Planet that although the car booking benefits have declined compared to the first month, from May to the end of July, Xiaomi Auto will still maintain the benefits of giving away Nappa leather seats worth 8,000 yuan and Xiaomi's smart driving enhanced intelligent driving function for free for life.
The above-mentioned salesperson said that under the fierce price war, Xiaomi SU7 needs to quickly seize the market and will be more cautious in adjusting the strategy of sales rights to avoid being "swept" out of the market.
"Price-based promotion" is one of the key means for car companies in the elimination competition, but for Xiaomi, compared with brands such as "NIO, Xiaoli, and BYD", it currently only has one model, the SU7, and it is difficult to form a differentiated competitive advantage in the market segment.
Earlier, according to a report by China Business News, Xiaomi Auto has begun developing a new platform that will adopt an extended-range hybrid powertrain. The three planned products are all SUV models positioned as family cars.
According to the plan, Xiaomi Auto will launch a pure electric SUV with an appearance similar to the Ferrari Purosangu next year, and an extended-range SUV for family users the year after. Spy photos of the pure electric SUV have been exposed many times.
What is certain is that Xiaomi Auto has now successfully sat at the table of the automotive industry.
On July 12, Xiaomi Automobile Technology Co., Ltd. appeared among the newly approved vehicle manufacturers in the "Announcement on Road Motor Vehicle Manufacturers and Products" (385th batch) issued by the Ministry of Industry and Information Technology.
In addition, in the details of the company's declared vehicle models published by the Ministry of Industry and Information Technology, Xiaomi Motors re-declared the information of Xiaomi SU7, and its declared company name has been changed to Xiaomi Automobile Technology Co., Ltd. The new car declaration map shows that the tail label of Xiaomi SU7 has been changed from "Beijing Xiaomi" to "Xiaomi".
In recent years, production qualifications have been tightened. Xiaomi Motors launched its products and started delivery in March this year. It took less than half a year for the Ministry of Industry and Information Technology to release the latest news to verify its production qualifications. This not only means that Xiaomi Motors has obtained independent car manufacturing qualifications and no longer needs to rely on OEM from other companies, but also means that Xiaomi Motors has entered the fierce competition in the current automotive industry.
However, this does not mean that Xiaomi Auto can sit back and relax.
The clearance of the automobile industry is a long process. Automakers need to have sufficient profits to support the company's progress and respond to changes in the industry with a flexible attitude. Xiaomi Auto is no exception.
On January 15, 2021, under the impact of sanctions faced by the company, Lei Jun began to seriously consider making cars. He formed a six-member research team to conduct research, conducted 85 surveys in more than 10 cities in more than 70 days, and after holding four executive meetings, he invested $10 billion to enter this red ocean market.
Now, more than 100 days after the release of SU7, he has truly witnessed the cruelty and brutality of this market. However, this is just the beginning. Among the models that Xiaomi Motors has not yet released, both pure electric SUVs and extended-range family SUVs have already become a bloody market, especially the latter.
Although Lei Jun claims that Xiaomi is not afraid of being out of the market, Xiaomi was out of the market. However, every player in the automotive industry should not be underestimated. Tesla and BYD, with their years of technological accumulation and breakthroughs, cannot rest on their laurels. "NIO, Xiaoli and Li Auto" have proved that the failure of a model is enough to sink a company into a quagmire.
Apart from traffic, Xiaomi Motors cannot avoid key issues in the business field such as products, production capacity, inventory and demand. For Xiaomi Motors, a newcomer to the poker table, there is undoubtedly a more difficult and longer way to go.
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