Facing stiff competition in China’s saturated automotive market, Xiaomi is ramping up efforts to expand internationally. Sources close to the matter told 36Kr that Xiaomi is actively preparing to enter overseas automotive markets, underscoring its ambition to broaden its footprint.
Xiaomi has established a dedicated team within its international division to focus on overseas sales operations. Current recruitment efforts include roles for market researchers, project managers, and automotive after-sales engineers. In addition, Xiaomi’s autonomous driving department has created new positions aimed at ensuring regulatory compliance and deploying autonomous driving features in international markets. This highlights Xiaomi’s intent to make autonomous driving a cornerstone of its automotive strategy.
According to insiders, once this team is fully assembled, Xiaomi plans to initiate small-scale vehicle sales in select international regions to test market reception and lay the groundwork for future global operations.
Xiaomi’s international sales strategy will leverage its existing network of over 100 directly owned Xiaomi stores overseas. Reflecting this focus, Xiaomi president Lu Weibing recently announced an ambitious target to establish 10,000 Xiaomi stores worldwide within five years, bringing the company’s human-car-home ecosystem to global markets.
Over the past few years, international markets have contributed more than 50% of Xiaomi’s total revenue, supported by a robust network of authorized sales channels and direct retail stores. Xiaomi’s strong brand presence, cultivated through its success in smartphones and tablets, provides a solid foundation for launching its automotive exports.
Overcoming export challenges
In July, Xiaomi made its first move into international automotive markets by shipping two SU7 vehicles to France. The company held an exhibition in Paris’s Le Marais district, showcasing its human-car-home ecosystem at 7 Rue Bailly.
During this event, when asked about Xiaomi vehicles’ availability in France, founder Lei Jun said that the company aims to sell its cars in Europe by 2030. Given the rapid assembly of its automotive export team, this timeline may accelerate.
Xiaomi holds a unique advantage compared to other Chinese automakers entering international markets. Even before its automotive division began generating revenue, Xiaomi’s international sales accounted for more than half of its total revenue. In Europe, Xiaomi captured an 18% share of the smartphone market in Q3 2024, ranking third and reflecting a 1% year-on-year increase.
Industry experts noted that Chinese automakers face significant hurdles in gaining brand equity abroad. “While many Chinese automakers have opened stores in Europe, foot traffic is often low compared to local brands,” one insider told 36Kr. “Curious visitors frequently leave after hearing the brand introduction.”
Xiaomi’s proven success in the international smartphone market has laid a strong foundation for its automotive export ambitions.
In Europe, while Xiaomi’s strength lies in online retail, its market presence was established through robust offline strategies. These included close collaborations with European telecom operators and localized marketing initiatives tailored to regional preferences. Compared to other Chinese automakers, Xiaomi’s deep familiarity with global markets and extensive operational experience position it for quicker and more effective local market entry.
The SU7, priced at RMB 200,000 (USD 28,000) in China, is positioned as a premium vehicle. However, tariffs and shipping costs are expected to raise its price significantly in overseas markets, where it will target high-end consumers—a segment Xiaomi has historically struggled to penetrate.
According to Canalys, Xiaomi’s European smartphone sales are largely driven by cost-effective models. In the premium smartphone market priced above USD 800, Xiaomi holds less than 2% market share, compared to Apple’s 77% and Samsung’s 16%.
Xiaomi’s financial reports reveal that overseas users generate significantly lower revenue per capita compared to domestic users, underscoring the challenges of entering the premium segment in international markets.
For Xiaomi to succeed with high-end automotive exports, it must overcome a critical obstacle: establishing credibility and acceptance within the premium market.
Breaking the mold for Chinese EV exports
Chinese electric vehicle exports are experiencing rapid growth, particularly in parts of Asia and South America. Countries such as Thailand, India, the Philippines, Brazil, and Mexico are emerging as key markets. Notably, Brazil surpassed Belgium in 2024 with 40,000 Chinese EV imports, making it the largest export destination for Chinese EVs.
In these regions, BYD has solidified its position as a market leader with models like the Dolphin, Seal, and Yuan Plus gaining significant traction among consumers in Southeast Asia and South America.
For premium Chinese EVs, Europe often serves as the first testing ground. Automakers such as Nio, Xpeng Motors, and Zeekr have established operations there, with mixed results. Data from the European Automobile Manufacturers Association (ACEA) shows that Chinese brands accounted for 11.1% of newly registered electric cars in Europe in June 2024, totaling 23,000 units. Among them, SAIC Motor’s MG4 EV was the standout, selling 13,000 units and becoming the bestselling Chinese model in Europe. In contrast, premium models like Nio’s ET5, priced at EUR 59,000 (USD 61,735), struggled, with just 34 units sold in Germany during the same period.
Affordable models remain critical for Chinese automakers to overcome sales barriers in Europe. High-end models face stiff competition from established domestic brands like Mercedes-Benz, whose C-class is priced at EUR 45,000 (USD 47,085). Chinese automakers still grapple with brand recognition and pricing power compared to their European counterparts.
Xiaomi, however, may have a distinct advantage. While Apple dominates Europe’s smartphone market and Volkswagen, Mercedes-Benz, and BMW lead in automotives, these automakers are heavily investing in proprietary in-car operating systems instead of adopting Apple’s CarPlay updates. This focus creates an opportunity for Xiaomi’s unique selling point: its integrated ecosystem.
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Leveraging its vast smartphone user base, Xiaomi is well-positioned to create seamless connectivity between phones, cars, and other smart devices. This integrated human-car-home ecosystem could be a critical differentiator for Xiaomi in overseas markets.
Despite its potential, Xiaomi faces challenges in executing this vision internationally. Data privacy regulations, compliance requirements, high tariffs, and logistics costs present significant hurdles. Successful localization in R&D and marketing—areas where Xiaomi has shown strength—will be essential to overcoming these obstacles.
Xiaomi’s ultimate aim is to go beyond selling cars—its eventual goal is to introduce its human-car-home ecosystem concept globally. As one of the few companies capable of producing both smartphones and cars while maintaining a strong user base and brand influence, Xiaomi is uniquely positioned to pioneer premium Chinese EV exports. This strategy carries not just the promise of market entry but also the potential to redefine perceptions of Chinese automotive brands in the global premium segment.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Xu Caiyu for 36Kr.