Xiaomi’s Declining SU7 Electric Sedan Orders
SHANGHAI (Reuters) – Xiaomi, the Chinese tech giant known for its smartphones, is currently facing a significant decline in new orders for its SU7 electric sedan. This downturn is a growing concern as it coincides with increasing consumer dissatisfaction that jeopardizes the company’s previously successful sales trajectory.
The Rise of the SU7 Electric Sedan
The sporty electric vehicle quickly gained popularity among consumers in China after its introduction in March of the previous year. By December, its sales figures surpassed those of Tesla’s Model 3, making it a front-runner in the world’s largest automotive market on a monthly basis. The rapid ascent of the SU7 demonstrated Xiaomi’s potential to disrupt the automotive sector.
Consumer Concerns Following a Fatal Accident
However, the tide has shifted since last month when a tragic accident involving an SU7 occurred, leading to heightened concerns among consumers regarding the safety of the smart driving features that Xiaomi promotes. This incident has sparked widespread debates and intensified regulatory scrutiny over the marketing of such technology in vehicles.
Regulatory Developments
In response to the accident, Chinese regulators have tightened measures governing the promotion of smart driving functionalities, which have become a staple of Xiaomi’s marketing strategy. The company’s lack of communication regarding the matter has further aggravated public sentiment. Notably, Xiaomi did not respond to requests for comment sought by Reuters regarding this situation.
Significant Decline in New Orders
Moreover, analysts from Deutsche Bank reported that new orders for the SU7 plummeted by 55% in April compared to March. They indicated that during the first two weeks of May, there were only 13,500 orders for the SU7, a stark contrast to the peak of 23,000 orders recorded in the second week of March.
Controversial Marketing Practices
Xiaomi has attracted additional controversy recently after issuing an apology for what it termed “unclear communication” following customer complaints. Some SU7 owners expressed frustration over misleading information concerning a premium dual-vent carbon fiber hood, which they believed had been inaccurately portrayed in marketing materials. Offered as an optional upgrade for 42,000 yuan (approximately $5,826), many customers were disappointed to discover that the hood lacked internal air ducts, directly conflicting with prior assertions made by the company.
Approximately 400 owners of the SU7 Ultra requested refunds due to this discrepancy, as reported by Shanghai’s state-owned media, the Paper. This situation illustrates a growing credibility crisis for Xiaomi and raises important questions regarding practices within the new energy vehicle industry.
Challenges Faced by Xiaomi’s CEO
Lei Jun, Xiaomi’s CEO and a significant figure on social media with 26 million followers on Weibo, reflected on this difficult period, describing it as the most challenging month he has faced since the company’s inception a decade ago. The recent backlash signals a critical juncture for Xiaomi as it navigates the complexities of the automotive market.
Confusion Surrounding Delivery Estimates
In addition to these marketing controversies, customers and analysts have reported confusion regarding Xiaomi’s delivery time estimates for the SU7. Many purchasers have discovered that predicted delivery times are often dramatically overstated, resulting in them receiving their vehicles much earlier than anticipated. This inconsistency has led to speculation among some analysts that Xiaomi may be leveraging this strategy as a means to cultivate an artificial sense of scarcity in the marketplace.
Consumer Initiatives for Transparency
In an effort to bring more clarity to the delivery process, a Chinese blogger known as A Zu developed an app that allows SU7 buyers to submit their purchase and pick-up details. This application aims to collate data to better comprehend Xiaomi’s delivery patterns. As of Wednesday, the official Xiaomi app was indicating estimated delivery times ranging from 26 weeks to as long as 11 months.
Xiaomi’s Marketing Strategy Under Scrutiny
A Zu, who chose to remain anonymous but is also a SU7 owner, stated a desire for Xiaomi to adopt a more transparent approach regarding its delivery schedules. For years, Xiaomi has implemented effective marketing strategies to promote its electronic devices, but the automotive industry presents unique challenges. Unlike consumer electronics, vehicles involve more deliberation and substantial financial commitments from customers, who expect brands to consistently meet their promises and maintain long-term reliability.
Conclusion: A Critical Crossroads for Xiaomi
Xiaomi finds itself at a crucial crossroads as it confronts falling orders and a rising tide of consumer dissatisfaction. The backlash from the SU7 incident, combined with inconsistent marketing and delivery practices, could have lasting implications for the brand’s credibility and position within the automotive sector. As the company works to regain consumer trust, it will need to reassess its strategies to align better with the expectations and realities of the automotive marketplace.
https://finance.yahoo.com/news/xiaomis-ev-orders-slump-china-104437058.html
