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Recently, a message from Xiaomi Auto shocked the entire industry - this new electric vehicle manufacturer, after just announcing the successful delivery of the 10,000th car to users, suddenly announced that all production was suspended.
This turn of events came too suddenly, and the outside world's optimism about the prospects of Xiaomi cars came to naught overnight. The electric vehicle manufacturer, which was "established in June, mass-produced in October, and delivered in December", has reached a crossroads.
The shock of the shutdown of the Xiaomi car
In March 2021, Xiaomi Group announced the establishment of a joint venture with Great Wall Motor and Lucky Holding to officially enter the field of smart electric vehicles. In June 2021, Xiaomi Auto was officially established.
Subsequently, with the mission of "enabling more people to enjoy the beauty of technology", Xiaomi Auto launched its first mass-produced model, the Xiaomi C1, and announced that it will be delivered to users before the Spring Festival in 2022.
In just a few months, Xiaomi cars have sprung up, and bookings have grown wildly.
According to official data, Xiaomi C1 received more than 10,000 orders in just one hour after the pre-order, and a week after the press conference, the total number of pre-orders exceeded 100,000. The public's expectations for Xiaomi cars have reached unprecedented heights.
Just when the outside world was optimistic about the prospects of Xiaomi cars, this new brand, which was like chicken blood, suddenly announced a shutdown after delivering 10,000 vehicles. The turn of events came so quickly that it was hard to believe.
The reason for the shutdown is speculated
In the face of the sudden news of the shutdown of Xiaomi Automobile, all parties inside and outside the industry have speculated about the reason for its shutdown. According to the analysis, the following factors may lead to Xiaomi taking shutdown measures:
At present, the global chip supply is seriously insufficient. The chip supply chain has been in a tense state for a long time, and major automobile companies are generally facing chip difficulties, and some companies have to reduce production or stop production.
Xiaomi, as a new entrant, is in a weak position in terms of chip supply and may also suffer from supply shortages.
Xiaomi Auto has been established for a short time, and the system may not be perfect. During periods of high growth, its supply chain management may have exposed some issues that require downtime to adjust. In addition, the soaring price of raw materials has also increased production costs, and supply chain management needs to be optimized.
As a new company, Xiaomi Auto's production line is still in the ramp-up period, and its production capacity may not be able to keep up with the growth rate of reservations. Downtime allows it to optimize production lines, increase capacity, and ensure product quality.
In addition, it is also common practice to pause for a certain period of time when a new product is launched, which can better inspect the product and improve the quality.
Automobile production requires a large capital investment. Some analysts believe that the rapid expansion of Xiaomi cars may lead to problems in the capital chain, and the shutdown can reduce cash outflows.
However, some analysts pointed out that Xiaomi Group is strong, and the capital chain may not be a key factor. The exact reason for this is yet to be confirmed.
Outlook: A turning point in a crisis
Despite the many adverse effects of the shutdown on Xiaomi Auto, companies should also seize the opportunity to turn the crisis into a turnaround:
Xiaomi should take the opportunity to integrate supplier resources, strengthen supply chain collaboration, improve supply chain responsiveness and resilience, ensure the supply of key components, and reduce costs.
During the shutdown, Xiaomi can optimize the layout of the production line, increase production capacity, and improve production execution in an all-round way, so as to be ready to meet the mass production of orders.
During the downtime, the product design can be optimized to improve the cost performance; And strengthen quality inspection, improve product quality and reputation. This will help strengthen the user base.
Xiaomi needs to formulate a risk response plan, reasonably control capital risks, strengthen internal management and cost control, and ensure the long-term stable development of the enterprise.
Xiaomi Auto needs to strengthen market communication, determine development plans to investors, explain rights and interests protection measures to consumers, restore market confidence, and rebuild brand reputation.
The shutdown of Xiaomi's cars is a big challenge, but it also contains opportunities. Businesses must rise to the challenge and turn the crisis into an opportunity. As long as we take positive measures and strengthen our confidence in development, Xiaomi Auto will be able to continue to write a legend in the electric vehicle market.