Xiaomi car pricing to play bad ? Selling a car at a loss is the best solution

Visual China.

Text |There is always a reason.

According to Apple insiders, Apple's chief operating officer Jeff Williams and Kevin Lynch, the vice president in charge of the project, jointly decided to terminate the project, and the 2,000 employees involved in the project will mainly turn to the artificial intelligence department, and focus on projects such as generative AI in the future.

One stone stirred up a thousand waves, and the bigwigs in the technology circle had different opinions, but some people were happy and some were worried, and the car companies were happy, and the future was missing such a potential strong competitor as Apple, and it was the mobile phone manufacturers who were worried, and the road to cross-border car manufacturing was once again questioned. Especially Xiaomi, which is about to launch its first new car, has previously conveyed the possibility of technology companies to transform the traditional car-making industry, and now, Apple's compromise has made this possibility more unpredictable.

The first battle of Xiaomi Auto has been difficult to see with the naked eye.

The first-class war staged at the beginning of the year caught consumers off guard. On February 19, BYD announced that its two plug-in hybrid models, the Qin Plus Glory Edition and the Destroyer 05 Glory Edition, were launched, with a starting price of 7980,000 yuan, compared with the previous version of the champion version of the model, the new version of the model** directly decreased by 20,000 yuan. This price reduction will bring the new energy hybrid model** down to 70,000 yuan for the first time.

BYD took the lead in throwing out the "king bomb", and other car companies are not far behind, such as SAIC-GM-Wuling, Changan Qiyuan, Nezha Automobile, Beijing Hyundai, Buick Automobile....Both announced price reductions for related models. As the smell of gunpowder in this war becomes stronger and stronger, the number of car companies and models in the price reduction camp is still increasing.

This war undoubtedly tugs at the heartstrings of all consumers, making consumers have further expectations for electric vehicles and fuel vehicles, which makes Xiaomi Auto, which is unwilling to announce it for a long time and hangs consumers' appetite by pricing, is extremely embarrassing.

At the Xiaomi car technology conference, the core information of Xiaomi Su7 has basically been disclosed, but the focus after the heated discussion is almost all around the pricing, which seems to indicate that the core technology including electric drive, battery, large die-casting, intelligent driving and intelligent cockpit and the main innovation point of Xiaomi car have not caught the attention of consumers.

Their greater expectation lies in whether Xiaomi, the "butcher", can lift the "butcher" to kill all sides in the entire new energy vehicle market.

But now, BYD took the lead in picking up the **, guiding the ** battle in the low-end market below 100,000 yuan, even if Xiaomi cars choose to take the cost-effective route, the impact it brings to the market will be greatly reduced, and it will not be able to reproduce the glory of Xiaomi mobile phones back then. On the contrary, if the Xiaomi car is priced on the high side, it is also inappropriate. Because at this time, it is contrary to the trend of price cuts by car companies, which will not only greatly reduce consumers' interest in Xiaomi cars, but also may also raise questions about the technology and strength of Xiaomi, a "newcomer" in car manufacturing.

In the range of 200,000-300,000**, Xiaomi cars are surrounded by "wolves". The coupe of the same level Zeekrypton 007, which has just been released, has a starting price of 20990,000 yuan, one month on the market, the large quantity approached 2500000 units, and the ZEEKR 001, which had been sold for nearly 3 years, ushered in a mid-term facelift, and the overall price did not increase but decreased; Xpeng 2024 P7i is priced at 20Starting at 890,000, the G9 is priced at 25From 890,000, looking at more than 250,000, there are strong competitors in the industry such as Tesla, Weilai, and Wenjie.

These strong competitors have built their own moats in the mid-to-high-end market, and the feedback from the market also confirms consumers' recognition of their brands, technologies and experiences. Xiaomi Auto has positioned its products in the mid-to-high-end from the beginning, and if there is no excellent technology or dazzling innovation, it is inevitable that there will be a suspicion of slapping a swollen face and becoming fat.

The mystery of Xiaomi's car pricing has created a topic for Xiaomi's first battle, but when the first battle in the market is in full swing, who will always wait for Xiaomi? Even more grimAs a result, the backlash has already begun to take shape.

Xiaomi's sudden rise in the smartphone industry can be called a typical example in the history of China's Internet business. As an outsider, Lei Jun wielded a big stick with one hand and created hunger marketing with the other, bringing new ways of playing and rules into the competition in the savage growth of the smartphone market, which can be said to have successfully guided and boosted the development process of the smartphone industry.

But in the new energy vehicle market, it is almost impossible to "copy" Xiaomi mobile phones.

In the ** war, the belated Xiaomi car wants both profit and sales, so it seems to be weak. Because it is no longer facing the stragglers who did copycat machines at the beginning.

In the past two years, the war between new energy vehicle companies has intensified, largely because with the rapid growth of new energy vehicle sales, the scale effect has emerged, and the production cost of volume models has been greatly reduced.

The higher the sales volume, the more the car company has the initiative. The reason why BYD was able to further explore the market in the 70,000 yuan range is that the huge sales volume of the BYD Qin family (including plug-in hybrid and pure electric) has sold a total of 48 in a year20,000 units.

BYD and Wuling Hongguang have played the role of the "butcher" in the tram industry, and now Xiaomi can't even go up to the table of the first battle. On the one hand,Xiaomisu7The positioning is obviously more inclined to the mid-to-high-end,Even if the brand image is established and other new products responsible for the volume are launched,It may not be the era of spelling; On the other hand, Xiaomi neither has enough sales to support cost reduction and downward exploration, nor does it lack the deep strength of traditional car giants to fight the first battle.

In the long run,How much pricing may directly determine the level of Xiaomi su7Sales level,But in the state of competition with the ** war as the mainstream,Whether Xiaomi can control costs as mature as Tesla、BYD in the future,Cater to the trend of price reduction,It is more related to the success or failure of Xiaomi's car。

Cost performance is Xiaomi's former "trump card",Innovative marketing is the strongest auxiliary,At the press conference of Krypton a few days ago,The person in charge of Krypton also ridiculed,"We respect and respect opponents like Xiaomi,We need to learn marketing, brand public relations, etc.。 But he followed this by emphasizing the need for Xiaomi to learn "our technology and product-defining capabilities." Looking at the new energy vehicle industry, or enlarged to the entire consumer market, almost all of them are moving towards a kind of technology worship and marketing disenchantment transformation, which makes Xiaomi, which is good at marketing, itself have a bit of a decline in word of mouth.

Internet cross-border car manufacturing, initially relied on creating topics and hot spots to build brand awareness, and then with the help of user thinking, it took the lead in screening out the audience group and relying on the fan effect to open a certain market. ButIn recent years, the R&D and manufacturing of new energy vehicles have become more and more mature, intelligence has accelerated, and the competition between car companies has turned to technology and experience.

Now, the biggest value of Internet marketing seems to be to assist car companies to show off their technology, which is vividly demonstrated in Wenjie. Last year, the new M7 returned to the stage with powerful intelligent cockpit and intelligent driving technology, and Yu Chengdong made a high-profile statement and took the opportunity to build a crazy momentum on the Internet, successfully establishing the brand image of Wenjie and Huawei, a technology provider, which led to a sharp increase in sales.

If Xiaomi Auto wants to gain a foothold, it is difficult to harvest the market by marketing if it does not come up with some hard-core technology and the best that makes consumers excited.

Why did Apple give up building cars? Perhaps it is more keenly aware of the chill than many car companies. According to UBS**, the growth rate of electric vehicle sales in the United States will plummet to 11% this year from 47% in 2023, and Bloomberg also said that the new energy market in the United States is cooling.

The domestic environment is also not optimistic. After a boom in December 2023, the new energy vehicle market cooled down significantly in January 2024, with sales of many new energy vehicle brands falling month-on-month in January, among which several leading new car manufacturers fell by more than 30%. This is not only because of seasonal factors, but also because of the oversupply and insufficient demand in the domestic automobile market.

Apple, which has not released the results of car manufacturing for a long time, is afraid of not being able to catch up with the dividend period of the market, and Xiaomi Automobile, which was not listed until this year, is also in a similar situation.

In addition to the hidden concerns of the external environment, the most intuitive reason for Apple's abandonment of the car-making project is the fear of touching the company's profits. After all, the war has repeatedly dragged down the profit margins of the entire industry, and even Tesla has had to reduce its gross profit margin from 25% to 18%.

The domestic competition for new energy trams should be the most tragic region in the world, before the core technology can still not achieve a substantial breakthroughXiaomi wants to achieve a win-win situation in sales and profits in the first battle of car manufacturing, which is no longer realistic, and how to survive has become the primary face of Xiaomi Automobile.

The pricing hotspot caused by Xiaomi cars this time seems to be the same as when Xiaomi mobile phones were first launched in the early years, but no matter the right time, place and people, they no longer exist. Even because Xiaomi Auto has repeatedly twisted its stance on pricing, it has become the original sin of many consumers' crusades.

After all, consumers' patience and anticipation run out of time.

This also fully shows that Xiaomi cannot lose its cost performance, just as the West cannot lose Jerusalem. Even if you lose money, it's better than a crash.

Therefore, if Xiaomi wants to reverse this unprecedented difficult situation, the best solution may be to price within the range of affordable losses, first seize the user market, and then bring added value to services and other related businesses, so as to slowly strive to survive first and avoid the imminent industry reshuffle storm and the "cyber violence" of the brand.

Otherwise, once the Xiaomi car exceeds the expectations of the public, it will inevitably be ruthlessly abandoned by consumers, because there are too many options for trams now.

For Xiaomi, from its ambition to today's twisting and pinching, building a car can be described as a rollercoaster experience. At this point, selling cars at a loss to increase sales is already the only feasible way, just to see if it has the courage of a strong man to break his wrist.

According to the data, as of the end of June 2023, Xiaomi's cash and cash equivalents were 31.5 billion yuan, short-term bank deposits were 43.1 billion yuan, long-term bank deposits were 13.8 billion yuan, and other assets that are relatively easy to realize, such as short-term investments, totaled 24.8 billion yuan, and total cash resources reached 113.2 billion yuan. There's no denying it,Xiaomi's cash reserves are very adequate.

However, it should be noted that in the third quarter of 2023, Xiaomi's R&D expenditure reached 5 billion yuan, a year-on-year increase of 220%, mainly due to higher R&D spending related to the smart electric vehicle business and other innovative businesses. Compared with other car companies, this number may not be enough. In the first half of last year, BYD's R&D investment was 1424.6 billion yuan, a year-on-year increase of 12020%, and NIO's R&D investment is 64200 million yuan, a year-on-year increase of 6415%, and the ideal R&D investment is 42800 million yuan, a year-on-year increase of 47%.

In order to make up for the gap in automotive products, Xiaomi's future R&D focus needs to be more inclined to the automotive business and increase investment in the automotive business, but Xiaomi's current revenue has peaked and has begun to decline.

The reason is very simple, whether it is the current fierce competition in the automotive industry or the increase in R&D costs brought about by car manufacturing, it is still a lot of pressure on Xiaomi. Selling the car first and letting the cash flow flow is a way to alleviate the current dangerous situation of Xiaomi Auto.

Previously, the opposite of Xiaomi and Apple was that Apple was worried about making cars to lower overall profit margins, and Xiaomi was pinning its hopes on building cars to improve the company's profit margins. This means that once Xiaomi cars succeed, the long-term benefits it brings to Xiaomi are worth looking forward to and looking forward to, so Xiaomi is reluctant to give up and wants to have both profits and sales. It's just that the more and more fierce knockout rounds will no longer give Xiaomi too much time to try and make mistakes and have a chance to start over.

It can be said that the new energy electric vehicle industry has long been different from the past, and Lei Jun is still late after all. But unlike Apple, which can retreat with its whole body, Xiaomi's arrow is already on the string and has to be sent.

At that time, the market may extinguish Xiaomi's dream. Therefore, in the crucial battle of selling cars, if Xiaomi does not raise the butcher's knife again, I am afraid it will really be too late.

But Xiaomi is no longer the Xiaomi it was when it was founded, can this knife still be lifted? The answer can only be left to time. After all, the way of playing with 1,000 injuries and 800 losses is also a big gamble for companies that have become relatively successful.