Is Xiaomi car in danger? Smartphone giant logs first-ever quarterly sales fall

Xiaomi co-founder Lei Jun has dedicated $10 billion to enter the mobility house in a potential try to take advantage of the shift in the direction of EVs.

By : HT Auto Desk
Updated on:
19 May 2022, 04:18 PM

File picture – A person makes use of his cell phone in entrance of a display exhibiting a emblem of Xiaomi. (REUTERS)

The going could have been powerful for Xiaomi Corp. in recent times however powerful appears to be getting more durable nonetheless with the smartphone big lately reporting its first-ever quarterly gross sales decline. While an enormous a part of the explanation for the autumn is believed to be strict lockdown restrictions in China with Covid-19 circumstances as soon as once more rising, the highway forward could proceed to be riddled with challenges with doubts additionally being solid on an formidable electrical car (EV) enterprise being labored on by co-founder Lei Jun.

(Also learn: Xiaomi to open car factory in Beijing with annual output of 3,00,000 vehicles)

Jun has dedicated $10 billion to enter the mobility house in a potential try to take advantage of the shift in the direction of EVs. There is big scope. But there are additionally huge challenges. Building an EV enterprise from nothing isn’t just about massive bucks however having the fitting individuals on the proper time and all aligned for the fitting – to be learn as widespread – goal. And it is not as if the car enterprise is faring significantly better than companies dealing in client electronics.

Covid pandemic has had a serious affect on manufacturing and provide whereas the crippling and unprecedented scarcity in semiconductor chip – used each in digital gadgets in addition to vehicles – has hit operations onerous. There is not any respite in sight because the scarcity in semiconductor chip is greater than prone to proceed for the higher a part of 2022 at the least. What it additionally means is firms like Xiaomi would proceed to have an uphill climb within the core enterprise of client electronics.

The silver lining although is demand. “The second half of 2022 is prone to be a peak season for the consumption of electronics merchandise, boosting the agency’s outcomes progress,” China International Capital Corp. analysts Hu Peng and Hanjing Wen wrote in a notice to traders, as per Bloomberg.  If true, Xiaomi may nicely return to inexperienced and it could be a drive again to a faster lane for the EV enterprise as nicely.

Xiaomi wants to storm the global EV business by 2024 by coming into the mass-market house. The goal is to tackle established and well-entrenched automotive manufacturers in an EV house which, say many, has leveled the competing floor. Tesla has an enormous lead right here however conventional auto manufacturers like Mercedes, BMW, Audi, Hyundai, Volkswagen, Ford, amongst others, are centered to play catch up.

First Published Date: 19 May 2022, 04:18 PM IST

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