2024-08-24
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Text/Dou Wenxue
Editor/Midnight
ExtremeGot myself into trouble.
On the morning of August 22, the news that "Jiyue's public relations director blasted Xiaomi for selling cars at a loss" attracted attention. Relevant screenshots showed that Jiyue's public relations director Xu Jiye posted on his WeChat Moments that Xiaomi and Lei Jun's selling cars at a loss is dumping and is the worst nature of businessmen.
Image source: Daily Economic News
Subsequently, Xu Jiye responded to the matter many times, saying that the circle of friends was just some personal remarks, and Jiyue CEO Xia Yiping also issued an internal notification and punished him.
The cause of the incident was that on August 21, Xiaomi Group released its second quarter financial report for 2024, disclosing its automotive business report for the first time. Data showed that Xiaomi's innovative businesses such as smart electric vehicles had revenue of 6.4 billion yuan, with a total of 27,307 new cars delivered in a single quarter, and a net loss of 1.8 billion yuan for innovative businesses such as smart electric vehicles.
Based on this calculation,Xiaomi MotorsThe loss of a single bike exceeded 60,000.
Xiaomi's approach of spending a huge amount of money to sell cars and expanding the market at the expense of losses is not something that all car companies can learn from. Xiaomi has sufficient cash flow support, but Jiyue may not.
Xu Jiye's comments were also due to this. Although Jiyue is backed by Baidu and
The second model of Jiyue, Jiyue 07, is planned to be launched.Xiaomi SU7As a direct competitor, Jiyue points the finger at Xiaomi, perhaps partly because it is compared with Xiaomi by industry insiders, and the more it is compared, the more likely it is to be evaluated as "not as good as" Xiaomi.
The brand’s reputation was not high to begin with, and the sales of its only product on the market, Jiyue 01, were also very poor.In the first half of 2024, the cumulative sales of Jiyue 01 were only 2,700 units. Since its launch, the monthly sales of this car have been as low as just over 100 units.
The "some companies that cannot be sold without discounts" mentioned by Xu Jiye in his circle of friends actually include Jiyue itself. At the end of November last year, Jiyue 01, which had just been on the market for only one month, reduced the price of all models by 30,000 yuan.
However, continuously lowering prices cannot solve the fundamental problem. Jiyue’s “self-rescue” may still have to start with improving product strength and brand power.
On the evening of August 21, Xiaomi Group released its second quarter financial report for 2024, revealing a "loss-ridden" report card for its car manufacturing business.
In sharp contrast to Xiaomi Group's total revenue of 88.88 billion yuan in the second quarter, Xiaomi Auto lost 1.8 billion yuan, with a loss of more than 60,000 yuan for each car sold.
On that day, the topic of "Xiaomi loses more than 60,000 yuan when selling a car" attracted attention.
Despite losing so much money, Lei Jun and Xiaomi were very calm, but Ji Yue was angry.
On the morning of August 22, Xu Jiye, the head of Jiyue's public relations, posted a screenshot of his WeChat Moments, which sparked controversy. The screenshot showed that Xu Jiye blasted Lei Jun and Xiaomi in his WeChat Moments, "Can entrepreneurs like Lei Jun have a little sense of public morality and shame? You are losing 60,000 yuan per car. Why do you sell so many cars when you are losing so much? Some companies lose money because they can't sell without a discount. What do you call Xiaomi and Lei Jun's behavior? In the past, this was called dumping. This is the worst nature of a businessman."
As the topic of "Xiaomi loses money selling cars" was very popular, the screenshot also became a hot search topic thanks to Xiaomi.
However, the "overwhelming popularity" brought controversy to Jiyue. In the information released by the subsequent media, Xu Jiye responded to the matter twice, saying that the circle of friends was mainly for expressing some personal opinions.
At the same time, he also posted a message on his WeChat Moments asking for forgiveness, saying that he hoped the media would convey a message to Xiaomi’s public relations personnel that he was already trying his best to reduce the impact of the incident.
That evening, Xu Jiye posted an email on his WeChat Moments in which he received an internal notification of punishment from CEO Xia Yiping, hoping that this would serve as a warning to others.
Image source: The Paper
From the perspective of the incident itself, what Jiyue is worried about is that Xiaomi has money to "throw" at cars and boost sales, but Jiyue's sales are dismal.
As can be seen from the financial report, Xiaomi's cash reserves are as high as 141 billion yuan. The strong financial strength provides a guarantee for the continued investment and development of its automotive business.
Just as Lei Jun said in the live broadcast room on August 22, Xiaomi Auto is still in the investment stage and its financial performance is not bad. In the second quarter, Xiaomi lost 1.8 billion yuan in innovative businesses such as smart cars, but in other words, it invested 1.8 billion yuan.
"Once we reach a certain scale, I believe it will be easy to break even, so there is no need to worry about us," said Lei Jun.
Image source: Xiaomi Motors official website
Looking at Jiyue, it was also born with a "golden key". It not only has the support of the Internet giant Baidu, but also has the endorsement of veteran car companies such as Geely.
But the flip side of having financial support is dependence on the financial backer. Whether Ji Yue can obtain sufficient financial support depends on proving its own strength first.
The Jiyue 07, which will be released in September, will compete with the Xiaomi SU7.
However, at this critical moment, the news that Xiaomi lost money to increase sales has once again refreshed the popularity of Xiaomi SU7. However, the attention and discussion of Jiyue 07 are not high, which may be the reason why Jiyue's public relations director is anxious.
Ji Yue’s biggest concern is still sales.
It is understood that Jiyue has set a high starting point for itself, positioning itself as a high-end smart car robot, and claiming that the company's intelligent driving capabilities are in the first echelon in China. Jiyue believes that currently, the only brands that can enter this echelon are Huawei,XiaopengTogether with Jiyue, Jiyue is the third company to officially launch city navigation assistance for users.
Baidu has also claimed that Jiyue Automobile has extremely mature high-level assisted driving capabilities and is the first car company in China to rely entirely on pure visual intelligent driving solutions.
The first model of Jiyue, Jiyue 01, is benchmarked against
Xia Yiping also said: "From the beginning to the end, we wanted to fight with Tesla. It's not to take advantage of Tesla's popularity, but when we defined this product in 2021, we fully benchmarked Tesla Model Y in terms of vehicle wheelbase, length, control, endurance, acceleration, etc."
Not long ago, Jiyue also released the OCC (occupied network) perception model and announced that it would officially push the OCC occupied network to all users, becoming the first emerging car company in China to realize the occupied network "on board".
Jiyue 01, source: Jiyue official website
However, the "high-profile" Jiyue 01 was not selling well.
Although the official announcement of the order volume of Jiyue 01 reached 15,000 units 24 hours after its launch, in fact, in order to boost sales, Jiyue 01 reduced the price of all models by 30,000 yuan just one month after its launch.
The data also confirms this. Since its launch, the sales of this car have been hovering in the three digits most of the time, with the lowest being only 218 units and the highest being only 1001 units. In the first half of 2024, the cumulative sales of Jiyue 01 were only 2,700 units.
The reason why Ji Yue is not selling well may have a lot to do with its brand image, product positioning, etc.
Although Jiyue is the main vehicle for Baidu to enter the car manufacturing industry, the name that first became known to the public together with Baidu was not Jiyue, but Jidu.
On January 11, 2021, Baidu Group announced its partnership with Zhejiang Geely Holding Group to officially enter the automotive industry; in March of the same year, the two parties' affiliated companies jointly established a joint venture, Jidu Auto Co., Ltd., with Baidu and Geely holding 55% and 45% of the shares respectively.
In June 2022, Jidu Auto quickly released its first mass-produced automotive robot concept car ROBO-01, with the slogan "a revolutionary automotive robot with intelligence and emotion".
However, the debut of ROBO-01 failed due to the sloppy animation production, which triggered the ridicule of "50-cent special effects" by netizens. At the same time, ROBO-01, which had been benchmarked everywhere, was also "bombarded" by other new power brands. For example, a senior executive of HiPhi Auto said that ROBO-01 "plagiarized in various ways" and was the culmination of Nezha's styling, Byton's large screen, and HiPhi's ISD.
Jidu Auto, which had a bad start, then underwent industrial and commercial changes. Geely's affiliated company withdrew directly, Baidu's affiliated company's shareholding ratio increased to 100%, and was renamed Shanghai Mihang Automobile Co., Ltd. at the end of 2022.
It was not until August 2023 that Geely and Baidu "renewed their relationship" and jointly invested in the establishment of Hangzhou Jiyuyue Automobile Technology Co., Ltd., with shareholding ratios of 65% and 35% respectively.
The Jiyue brand was officially born, but its popularity is not as high as before, and there are less than two months left before the release of its first new car.
Perhaps in a hurry to make consumers remember its "new name", Jiyue Auto has followed Jidu Auto's route of "benchmarking everywhere", often comparing its products with other brands before they are released, which has caused a lot of controversy.
At the same time, its positioning as a "car robot" is not a rigid demand for consumers to buy cars. Consumers' attention to cars is still more focused on space, power, endurance, price and other aspects.
Jiyue has been promoting its smart driving technology as better than its competitors, but it has ignored the fact that consumers will compare all aspects of its products with other brands. This has also led to other functions of Jiyue 01 becoming a point of criticism in comparison with other brands.
For example, both Jiyue 01 and Jiyue 07 adopt a handleless design, which was joked by netizens: What’s wrong with the door handle?
Part of Jiyue 01, source: Jiyue official website
Judging from the current situation, Ji Yue’s anxiety is understandable, but “criticizing friendly competitors” is unlikely to bring about actual changes.
In fact, it is not only Xiaomi Auto that is not making money. Many new energy vehicle companies are also selling cars at a loss.
According to China Business News, in addition to Tesla,BYDOnly three new energy vehicle companies, including Li Auto and Ideal, have achieved profitability, while most other new energy vehicle companies are in a state of huge losses.
For example, Leapmotor recorded a net loss of 4.22 billion yuan, which was narrower than the net loss of 5.11 billion yuan in 2022; Xpeng Motors' net loss was 10.38 billion yuan, and the loss margin widened by 13.6% year-on-year;NIOThe net profit loss reached 21.15 billion yuan, an increase of 45.25% year-on-year from 2022.
This year, NIO's net loss in the first quarter alone reached 5.18 billion yuan.
Not only are they losing money, but car companies are also cutting prices. According to DoNews, BYD,
According to data from China.com, compared with 2022, the average terminal price of fuel vehicles and new energy vehicles in 2023 will drop by 1%-3%, and the decline in new energy vehicles will be much higher than that of fuel vehicles.
At a time when technology is developing rapidly, new energy vehicle companies have to invest even greater amounts of money in research and development in the early stages to keep up with the rapid iteration pace of vehicle companies. The only way to make up for losses is to expand sales.
Therefore, if price reduction can bring sales, it is also a viable strategy.
As mentioned above, Jiyue reduced the price of all its models by 30,000 yuan just one month after the new car was launched on the market. However, the price reduction did not bring about an increase in sales. Instead, it caused Jiyue to suffer greater losses.
Jiyue 01 December 2023 price list, source: Jiyue official WeChat public account
According to the report of Auto Intelligence, in Zhengzhou, the average monthly sales volume of the Jiyue 01 is 7.5 units. Jiyue Auto has four stores in Zhengzhou, which means that on average each store sells less than two units per month.
You know, the operating costs of a car store are not low. The report also stated that based on the sales situation of selling two cars a month, it would definitely be a huge loss.
Therefore, Jiyue has high hopes for the upcoming new model Jiyue 07, but it was not until August 16 that Jiyue 07 officially announced its mass production. According to Leifeng.com, a salesperson said, "The delivery of Jiyue 07 may not be until the end of the year."
However, if Jiyue wants to save itself, it may still have to rely on intelligent driving technology.
On the one hand, intelligent driving is Jiyue's strength. On the other hand, the development prospects of intelligent driving are broad, and it has become a part that major new energy vehicle companies must plan for.
Founder Securities analysis shows that with the launch of multiple new models of smart brands, the penetration rate of high-level intelligent assisted driving will increase rapidly, and the autonomous driving industry is expected to continue to expand. With the industry trend of increasing penetration rate and the expected relaxation of autonomous driving policies, it is expected that high-level intelligent assisted driving will usher in a turning point in 2024.
Jiyue has also recently achieved a wave of sales growth by relying on Luobo Kuaipao.
In July this year, the sales volume of Jiyue 01 was 1,143 units, a month-on-month increase of 147.94%. According to Leifeng.com, an industry insider said that Jiyue and Luobo Kuaipao are on the same platform, and Luobo Kuaipao has boosted the sales volume of Jiyue after it became popular.
Carrot Run, image source Carrot Run official website
Jiyue does need more attention, but this incident reveals Jiyue's anxious mentality, which has no positive effect. Before Jiyue 07 is launched, perhaps Jiyue needs to see its own advantages and disadvantages, find more effective marketing methods, and reverse its current brand image.
(The header image of this article comes from Jiyue’s official website.)
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