Xiaomi president says car building hasn't started yet, decision was announced to get better resources

Chinese smartphone giant Xiaomi's car seems to be a little further away from hitting the road than expected.

Xiaomi has not officially started building cars yet, and the reason for the early announcement is to take into account two factors, nbd.com.cn quoted Xiaomi Group President Wang Xiang as saying on Thursday.

First, there were rumors about the matter previously, and Xiaomi decided to announce its entry into the car-making industry in order to achieve timely disclosure of information.

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Second, Xiaomi hopes to announce its decision in advance to get better global resources to build Xiaomi cars together.

Xiaomi relied on its ability to steadily grow its cell phone and AIoT businesses, and its ability to integrate internal resources, and decided to join the electric vehicle sector, he said.

Xiaomi announced its entry into the smart electric vehicle market on March 30 with an expected investment of $10 billion over 10 years, with an initial installment of RMB 10 billion, and Xiaomi Group CEO Lei Jun will also serve as CEO of the smart electric vehicle business.

Lei said, "This is the last major venture of my life. I am willing to bet my entire reputation in life to personally lead the team for Xiaomi cars."

Liu Qin, an early Xiaomi investor, said he had discussed building a car with Lei many times and that "Lei looks the same today as he did 10 years ago when he was all in cell phones.

On April 6, Lei said the results of a poll he launched on Weibo showed that fans wanted the company to build mid- to high-end cars, so the first Xiaomi car would be priced in the RMB 100,000-300,000 range.

Analysts at Ping'an Securities said on March 31 that Xiaomi's car will mainly target the price band below RMB 200,000 ($30,525).

The analyst said Xiaomi has strong supply chain management and cost control capabilities, and will launch a very cost-effective model.

In addition, Xiaomi has a certain brand influence and user base, strong user operation and management capabilities, and an integrated online and offline sales model.