Xiaomi is accelerating its expansion into the overseas automotive market. The company is preparing to establish an overseas automotive business under its international department, forming a new team dedicated to international sales. This team is focused on roles such as market research, project management, and electric vehicle after-sales support.
Additionally, Xiaomi’s automotive division is expanding its autonomous driving team, with new roles aimed at addressing regulatory verification and enhancing autonomous driving capabilities for international markets. Autonomous driving is expected to be a key focus area as Xiaomi works to strengthen its overseas car business.
The company plans to begin by conducting small-scale car sales in select overseas regions to gauge market reaction and prepare for larger-scale expansion. Xiaomi will leverage its international department and its network of over 100 Xiaomi stores worldwide to support these sales efforts. The company has ambitious plans to open 10,000 Xiaomi stores overseas in the next five years, integrating its “Human x Car x Home” smart ecosystem and new retail model.
Xiaomi’s success in international markets, particularly with its smartphones, tablets, and other products, has laid the foundation for its entry into the overseas automotive sector. More than 50% of Xiaomi’s revenue already comes from international markets, positioning the company to capitalize on its established brand recognition as it moves into this new territory. In July of this year, Xiaomi made its first step toward entering the European car market by showcasing two SU7 vehicles in Paris. CEO Lei Jun expressed Xiaomi’s goal of launching its brand in Europe by 2030. However, the rapid formation of Xiaomi’s overseas automotive team suggests that this timeline may be accelerated.
Xiaomi’s advantage in international markets is particularly strong when compared to other Chinese automakers. Even before generating revenue from its auto business, Xiaomi’s international revenue accounted for more than 50% of its total earnings. In Europe, Xiaomi’s smartphone market share reached 18% in Q3 2024, increasing 1% year-on-year, and positioning the company in third place. This solid brand recognition gives Xiaomi a strong foundation for its automotive ventures.
One of the key challenges Chinese carmakers face in expanding overseas is brand recognition. While many Chinese automakers have opened stores in Europe, the number of these stores is far fewer than those of European brands. Xiaomi’s established presence in the smartphone market, bolstered by partnerships with European carriers and localized marketing strategies, has already helped overcome some of these barriers.
However, challenges remain. For instance, the Xiaomi SU7, priced over $2,7487 in China, will likely face higher prices in Europe due to tariffs and transportation costs. This could position the model as a high-end vehicle in overseas markets, but Xiaomi’s limited presence in the high-net-worth segment may hinder its ability to capture the luxury market.
Data from Canalys indicates that in the European high-end smartphone market (above $800), Apple dominates with 77% market share, followed by Samsung with 16%, while Xiaomi holds less than 2%. Furthermore, Xiaomi’s overseas users tend to have lower purchasing power for internet services compared to their domestic counterparts, further complicating its efforts to break into the high-end market.
In conclusion, while Xiaomi has a strong brand and operational experience in international markets, particularly in Europe, its main challenge lies in establishing a foothold in the high-end automotive market, where it lacks significant recognition.
The global expansion of China’s electric vehicles (EVs) is rapidly gaining momentum, with strong growth in Southeast Asia, South America, and Europe. In Southeast Asia, countries like Thailand, India, and the Philippines, as well as Brazil and Mexico in South America, are experiencing increasing exports of Chinese EVs. Brazil, in particular, has surpassed Belgium as the largest export market for Chinese EVs, with 40,000 units exported this year. In these regions, BYD has emerged as a dominant player.
Europe remains a primary target for Chinese high-end EVs, with companies like NIO, XPeng Motors, and ZEEKR establishing operations there. According to data from the European Automobile Manufacturers Association (EAMA), Chinese EVs accounted for 11.1% of newly registered pure electric vehicles in Europe in June 2024, with 23,000 units sold. The SAIC MG4 EV, priced at 31,990 euros, was the best-selling Chinese model, selling 13,000 units. In contrast, the NIO ET5, priced at 59,000 euros, sold only 34 units in Germany during the same period. Affordable models remain the primary avenue for Chinese companies to achieve sales breakthroughs in Europe, as high-end models face significant competition from established local brands such as Mercedes-Benz, BMW, and Volkswagen.
However, the shift in the local automotive industry toward developing proprietary in-car systems, moving away from Apple CarPlay and focusing on intelligent driving experiences, could present an opportunity for Xiaomi. The company’s “Human x Car x Home” ecosystem sets it apart, positioning it as a unique player in the market.
Xiaomi’s potential breakthrough in the overseas automotive market lies in its ability to integrate its extensive user base, particularly its smartphone users, into a connected ecosystem that spans both vehicles and smart devices. This interconnection, which other carmakers are only beginning to explore, could provide Xiaomi with a competitive edge. However, regulatory hurdles, data privacy concerns, and high tariffs will pose challenges as Xiaomi seeks to establish this ecosystem overseas. Localized research, development, and marketing will be essential to the company’s success.
Ultimately, for Xiaomi, expanding into the global automotive market is not just about selling cars but about exporting its “Human x Car x Home” ecological concept and integrating vehicles into its broader ecosystem of products. With its established user base and brand influence, Xiaomi aims to carry forward the aspirations of China’s high-end electric vehicle industry as it seeks to establish a global presence.
Source: Xiaomi
