"Xiaomi Cars" Trapped in Prejudice

Image source @ vision china

Wen | Bear Out of Ink Please Note, Author | Bin Bin

In response to the phrase "everyone opposes prejudice, but everyone has prejudice", in the new energy vehicle market, prejudice has never disappeared, but it has only been transferred from one car company to another.

One night in 2013, Li Bin found Lei Jun to talk about Weilai’s business plan. Lei Jun said, "I have a headache when I hear the Internet building a car, which is almost equal to a liar."

In the spring of 2021, Lei Jun announced that he would "fight for Xiaomi Automobile", and his prejudice came back. What is different is that this time he and Xiaomi Bus Station are in the position of being examined.

"Watch the advertisement for 30 seconds before driving?"

When I saw the news of Xiaomi Auto, the first thing that the clever netizens thought of was to ridicule the characteristics of many advertisements for Xiaomi products. Two years later, Xiaomi, a high-profile car maker, likes to mention hot search every time there is a sign of trouble, and this joke can always be seen in hot reviews.

Coincidentally, Baidu, which officially announced the car two months earlier than Xiaomi, encountered the same trouble. In the timetable of Jidu, its first model will be officially delivered to users in the third quarter of this year, but today it still can’t escape the question two years ago, "Baidu’s car has no privacy."

The car is getting closer and closer and the prejudice is getting deeper and deeper.

If it only stays at the verbal level, "millet cars" can laugh at the prejudice of public opinion. However, referring to the past cases of building cars on the Internet and the objective development law of the new energy vehicle market, I am afraid that the impact caused by prejudice is not just a joke.

Where does the lingering label come from?

I didn’t see his voice first, and the Internet knows this well. Xiaomi and Baidu are among them. Since they officially entered the market, their every move has attracted much attention from the market.

Taking recent years as an example, Xiaomi Automobile has been searched twice. First, the design documents of the automobile flowed out, and the design details of the front face and tail of the vehicle were exposed. The second is the follow-up of this matter, and the supplier suspected of leaking secrets was fined 1 million yuan.

It stands to reason that Xiaomi appeared as a victim in the whole incident, because the supplier’s information security management was not in place and his own products were leaked in advance. However, everyone’s concern is not here.

"Feeling is a marketing tool, not deliberately revealing punishment." As can be seen in the comment area of related reports, most netizens think that leaking secrets is more like a way for Xiaomi to build a car.

The prejudice of public opinion is thus highlighted.

In the book The Nature of Prejudice, Gordon allport, the father of personality psychology, mentioned, "No one is born with prejudice. Prejudice is always learned.”。 The reason why onlookers give all kinds of prejudices to Xiaomi car is that everything can be traced.

Turn your attention to the business before Xiaomi built a car. Taking the leak as an example, friends who are familiar with Xiaomi should know that this kind of thing has happened many times on mobile phone products. The subway engineering machine leaked, the new machine was hung with idle fish before it was released, and KOL was fined for leaking ….. Whenever similar incidents happen, new products will undoubtedly win a wave of attention.

It’s still a familiar formula, or a familiar taste. When the product is changed from a mobile phone to a car, it is inevitable that netizens who have long been accustomed to leaking secrets will question it.

In addition, there is no need to say much about the ridicule of system advertisements and appearance stitching, which are stereotypes formed by netizens based on Xiaomi’s performance in the mobile phone market. MIUI is nicknamed "ADUI" because of the advertisement that fits the needle, and its design has been spit out many times because it imitates Apple.

What we have done in other fields before has contributed to the lingering labels on automobile products today.

The same is true for Baidu to build a car.

In 2018, Baidu is focusing on autonomous driving technology. CEO Li Yanhong said that Baidu will not build its own cars, will not open its own production lines and design engines, and will only do research and development on autonomous driving technology that it is good at. When he personally went off to build a car, he put it another way. What Baidu wanted to build was not a car, but a car robot.

No matter what it is made, the question of public opinion is very sharp: sitting in Baidu’s car, does the user have privacy?

Li Yanhong personally answered this question. Smart cars have made privacy issues increasingly prominent. "Protecting data security is not only the requirement of technology companies like Baidu, but also the bottom line of the industry."

Recalling the negative news in Baidu’s early years, it seems difficult for netizens to agree with the above remarks. On the one hand, Li Yanhong’s remark that "China people are willing to exchange privacy for convenience or efficiency" really hurt users and made everyone have doubts about Baidu’s privacy protection. On the other hand, the impact of events such as "Wei Zexi" has not been completely eliminated.

Moreover, there are always some netizens who have good memories. When Xiaomi and Baidu were hot searching for cars, they mentioned the old things in a teasing way, and the market’s prejudice about the corresponding automobile products gradually deepened invisibly.

The car is not listed, and prejudice comes first.

Not just talk, prejudice will directly affect sales.

According to the plan, Jidu Automobile will be delivered in the third quarter of 2023, and Xiaomi Automobile will be mass-produced in 2024.

The products are getting closer and closer to consumers, and the problem that car companies have to face up to is: Is the prejudice of public opinion just talk, or will it affect the actual sales?

The answer is more inclined to the latter.

The shackles of labels and the obstacles of prejudice have actually been verified in other markets, and Xiaomi has suffered losses more than once. For example, Xiaomi has made great efforts in the high-end mobile phone market in recent years. In addition to the product level, the deep binding between the brand and "D wire" and "cost performance" has also made Xiaomi’s high-end battle more and more difficult.

Looking back at the automobile market, when consumers make purchase decisions, prejudice is more like a mountain, which is inevitable.

"You drive a Mazda, so it’s no wonder that you race cars. You are not qualified to attend this meeting at all." Tony Leung Ka Fai’s classic line in the movie Black Gold is the interpretation of brand prejudice in the automobile market, especially in real transactions.

No matter Japanese, German, French, Korean, American or domestic, they all have certain fixed labels, which affect consumers’ choices. For example, when it comes to Japanese cars, some people may refuse because of "thin iron sheet, light body and poor safety factor", while American cars are usually labeled as "rough workmanship, high fuel consumption and high failure rate".

Xiaomi and Baidu’s Internet-built cars and new forces-built cars, in addition to the above-mentioned slots, are even burdened with group prejudice, and can even be said to be "original sin".

On the one hand, many car companies have swarmed and dispersed in a hubbub, which is very consistent with the behavior of "making hot money". Many brands have not made a car from appearance to extinction, but the "pie" has been drawn to be the first in the country and the world in a few years. On the other hand, it believes in capital play, lacking its own accumulation. The core components are all manufactured by the supply chain, and everything is matured by capital. The first users are equivalent to "mice".

Previously, the market research report released by J.D.Power, a joint market research organization of Global Times, showed that the biggest concern of consumers for new car brands was "unreliable quality". Therefore, it is not groundless for Lei Jun to equate Internet cars with scammers.

From this perspective, the advantages of traditional car companies have become more and more prominent, with solid technology accumulation, perfect supply chain system and years of brand accumulation, all of which are not available in internet car making.

For this reason, when the window period of new car companies rushing to run has passed, traditional car companies have begun to focus on new energy and smart cars, and the options in the market are more abundant, and the enthusiasm and market share of new car companies are easily taken away.

The sales volume of the new energy passenger car market in 2022 is witness.

According to the data of the Federation, in 2022, the total retail sales of passenger cars in China market was 20.543 million, a year-on-year increase of 1.9%; Among them, the retail sales of fuel vehicles was 14.868 million, a year-on-year decrease of 2.302 million; The retail sales of new energy vehicles reached 5.674 million, a net increase of 2.687 million.

The rapid growth of the new energy market has not fallen on new car companies. The sales growth rates of representative brands Weilai, Ideality and Tucki are 34%, 47% and 23% respectively. In contrast to the traditional car enterprise camp, the growth rates of new energy passenger cars of BYD, Geely and Ai ‘an are 208%, 278% and 116% respectively. The growth rate of joint venture car companies in the new energy market also exceeds that of new car companies, and the growth rates of FAW-Volkswagen and SAIC-Volkswagen are 42% and 50%.

In the process of consumer decision-making, the prejudice of public opinion directly affects the weight of new car companies in consumers’ minds; The contrast between new car companies "jumping on the street" and traditional car companies further provides a basis for the biased people from the factual level.

Ten years later, the goal is "Wei Xiaoli" a hundred times.

For future sales expectations, new car companies have always dared to set a flag. Often, the later the car companies enter the market, the bigger the tone.

For example, when a car was not built, Xu Jiayin announced that it would sell 1 million cars in 2025 and 5 million cars in 2035. Nowadays, the situation of Hengchi Automobile is obvious to all, and whether its brand can continue to operate is unknown.

However, compared with Lei Jun, Xu Jiayin is still a little conservative. Lei Jun stated in Weibo that Xiaomi Automobile aims to sell 10 million vehicles a year, and recently continued to supplement it at the Investor’s Day, "striving to enter the top five in the world in 15-20 years".

How difficult is it to achieve small goals?

Let’s look at the concept of annual sales of 10 million vehicles from the data level. According to the data released by the China Automobile Association, in 2022, the total sales volume of domestic brand passenger cars in China market was 11.766 million; Looking at the world, in 2022, only Toyota in the world passed the 10 million mark, and the second-ranked Volkswagen sold 7.85 million vehicles a year, which is still a long way from 10 million.

Moreover, both Toyota and Volkswagen are of a group nature. The annual sales of Volkswagen’s 7.85 million is actually the sum of the sales of fuel vehicles and new energy vehicles of its Volkswagen, Audi, Porsche, Skoda and other brands.

Further referring to the sales scale of new car companies, the first echelon "Wei Xiaoli" recognized in China has sales targets of 200,000, 200,000 and 350,000 respectively in 2023. Compared with the target in 2022, Weilai will increase by 50,000 vehicles, while Tucki will decrease by 50,000 vehicles instead of increasing.

The goal is still an ideal state. In fact, the sales volume of "Wei Xiaoli" in the past year was 122,500, 120,800 and 133,200 respectively.

All three were born in the last wave of internet car-making, that is, around 2014. As a follower, Xiaomi’s first car was mass-produced in 2024. Time is ten years late, but ambition is magnified a hundred times.

Then look at the difficulty of practical operation. Whether "Xiaomi Cars" can sell well after listing is quite complicated, but one thing must be faced and there is no shortcut.That is, the production capacity that matches the sales volume of ten million years..

Common sense tells us that scale is the basis of the profit of the automobile industry, and the cost of R&D and sales can only be shared equally when the sales volume goes up. Therefore, new car companies generally believe that there is a line between life and death in the market, with an annual sales of 100,000 vehicles. At present, companies such as "Wei Xiaoli" have crossed this line, but the loss problem has not been solved.

Take the third quarter of 2022 as an example. For every car sold by the three car companies, the corresponding losses were 13.01, 8.04 and 61,900 yuan.

To achieve large-scale expansion, production capacity is the most fundamental guarantee, otherwise production can not keep up with the growth rate of orders, and delivery can not be completed. However, because of the lack of precipitation, new car companies will just expose shortcomings in terms of production capacity.

Take "Wei Xiaoli" as an example. After years of layout, comprehensive OEM and self-built mode, the production capacity that can be realized this year is also below 500,000 vehicles per year. Jianghuai Automobile, which is contracted by Weilai, disclosed in the cooperation agreement that by May 2024, Jianghuai is expected to expand its production capacity to 240,000 vehicles.

BYD, the "strongest king" in the new energy market, faced with an annual sales order of 1,863,500 vehicles in 2022, which made consumers fall into the queue of waiting for the car to be delivered in half a year. Therefore, in BYD’s strategic planning, capacity expansion has naturally become a top priority. Last year, BYD Changzhou Base, Jiangxi Fuzhou Base, Hefei Changfeng Phase I and other new capacity were put into production. This year, Zhengzhou Base, Hefei Changfeng Phase II and Shenzhen-Shantou Project will be put into production one after another. There are 10 production bases at full capacity, with an overall planned production capacity of 4 million vehicles.

In contrast, in 2021, Xiaomi announced that Xiaomi Automobile will build a vehicle factory with an annual output of 300,000 vehicles in two phases, and the production capacity of the first and second phases will be 150,000 vehicles respectively.

Without comparison, there will be no harm. At the same time, "Xiaomi Auto" must respect the basic operating rules of the automobile industry, otherwise the swearing will not land at all.

It is easy to draw cakes, but difficult to eat them.

"In the past three years, 75 brands have fallen." Recently, Zhu Huarong, chairman of Changan Automobile, publicly stated that "the competition in the future will still be very fierce." It is estimated that 60%-70% of the brands will be shut down and turned around after 3-5 years.

In a challenging market, basic survival has become a problem, especially for new car companies.

The sales volume in January has been able to explain the problem. The retail sales volume of the domestic passenger car market reached 1.293 million, down 37.9% year-on-year and 40.4% quarter-on-quarter. Among them, new energy vehicles sold 332,000 vehicles in January, down 6.3% year-on-year and 48.3% quarter-on-quarter. Including Wei Xiaoli, new car companies jointly handed in an "ugly" transcript.

In January, 2023, LI’s monthly sales exceeded 10,000 vehicles, while Weilai Automobile and Xpeng Motors did not reach 10,000 vehicles, down by 11.9% and 59.6% respectively. In addition, the sales of brands such as Nezha Auto, Celeste and Zero Run all declined to varying degrees. Taking the zero-running car as an example, it decreased by 85.9% year-on-year and 86.6% quarter-on-quarter.

Whether the "open door black" sales decline will continue can be judged by some wind directions.

On the one hand, the state subsidy that lasted for 13 years in the new energy market officially withdrew in 2023, and people in the industry generally believe that the industry will experience a period of pain. Past data can also prove that in January 2016, the state subsidy retreated for the first time, and the sales of new energy vehicles in that month decreased by 63% month-on-month. In January 2021 and January 2022, the subsidies retreated, which led to the sales volume decreased by 20.5% and 18.5% month-on-month, respectively.

On the other hand, consumer demand is suppressed by the economic trend in the short term. Musk once said pessimistically that since 2023, almost all new energy vehicle markets have demand problems, which also explains why Tesla will start a new round of price wars at the beginning of the year, and Model 3 and Model Y have given the lowest prices ever in China market.

Moreover, as mentioned above, with the efforts of traditional car companies, the market growth rate of brands such as BYD, Geely, Ai ‘an, Chery and Changan has been ahead of new car companies, and the sales base is also larger than that of new car companies.

The increase in the industry itself is not optimistic. "Millet Cars" must not only compete with traditional car companies, but also have close combat with other new car companies. The degree of competition is self-evident.

The more realistic and urgent problem facing Xiaomi Automobile is how to survive in the cruel market. Under the above competition, the goal of selling more than 10,000 vehicles a month is radical, not to mention the annual sales of 10 million vehicles by Xiaomi.

Back to the topic of prejudice affecting sales, as latecomers, "Xiaomi cars" have to complete an additional task-eliminating prejudice, in addition to facing the fierce competitive environment.

Only by crossing market prejudice and jumping out of the storm of public opinion can products have a chance to win the favor of consumers.

New car companies such as Weilai, Tucki, Ideality, Nezha and Zero Run, which experienced the last wave of elimination, once faced the same problem. For example, regarding the pricing of Weilai, Jianghuai Automobile, which has never built high-end, is the OEM. Why does Weilai sell for more than 400,000? Another example is the ideal three-piece suit. Does the emphasis on "refrigerator sofa color TV" put the cart before the horse?

Sales reflect the recognition of the market. As the representative of new car companies, "Wei Xiaoli" has crossed the prejudice, or at least one foot has crossed it.

Even so, Wei Xiaoli is still cautious about the future. So far, a latecomer who has never seen a real car, how can he have the confidence to draw the "pie" to the global leader?

The market is fair and cruel, and the double factors of public opinion prejudice and competition escalation put forward higher requirements for "Xiaomi cars". There is only one way left for Xiaomi and Baidu, and that is to come up with better products. Otherwise, they will only continue to be trapped in prejudice.