How Xiaomi may increase its production to meet orders?
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How Xiaomi may increase its production to meet orders?
- The Chinese producer of electronic products Xiaomi presented its first car at the Beijing Motor Show, the SU7 (“Speed Ultra” 7), a battery electric D-segment sedan which openly competes with the Tesla Model 3, also from the D-segment, which sold 300,000 units in China last year and more than a million since its launch in the country in 2020.
- Xiaomi's first production forecasts indicated a volume of 100,000 units per year of the SU7 (assembled by the Chinese carmaker BAIC Motor in one of its factories located in Beijing with a capacity of 150,000 vehicles per year).
- With the level of orders having already reached 88,063 units at the end of April, Xiaomi increased its production forecasts to 120,000 units in 2024 and 150,000 units in 2025 in order to reduce delivery times reaching six to eight months depending on the version.
- To achieve these objectives, the carmaker will notably double daily production time from 8 hours to 16 hours, by doubling the teams. Inovev presents below the different scenarios for increasing production to meet firm orders (scenario 1), anticipate additional orders by the end of the year (scenario 2) and finally, more hypothetical, saturate capacities of the current factory (scenario 3).
- Xiaomi has also decided to build a second assembly plant in 2024-2025, still in Beijing, with a production capacity of 150,000 vehicles per year, like the current factory. This factory could produce the brand's future SUV. It is still unclear whether this is a factory built by Xiaomi alone or whether it is a factory built in cooperation with BAIC. Xiaomi will therefore have a production capacity of 300,000 vehicles per year from 2026.
The Fiat Tipo is set to disappear from the European market
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The Fiat Tipo is set to disappear from the European market
- Designed in the early 2010s, ten years before the merger of PSA and Fiat-Chrysler, the Fiat Tipo was launched on the European market at the end of 2015. It was positioned in the C-segment, that is to say it succeeded the old Fiat Stilo and Bravo. It was available in three bodies: five-door sedan with hatchback, four-door sedan with trunk and five-door station wagon.
- Produced in the Tofas factory in Bursa (Turkey), the Fiat Tipo was often be in the top 3 sales in Turkey (where it is named Egea) but its success in Europe (perimeter: 30 countries: EU + United Kingdom + Switzerland + Norway) was much more mixed, even in Italy.
- It has been sold at 500,000 units in ten years (i.e. 50,000 per year on average) with a peak of 125,000 units in 2017 and only 17,500 in 2023.
- But production and sales continue at a good pace in Turkey (700,000 units in ten years, or 70,000 per year on average) with a peak of 124,000 units in 2023. It has also become the only car sold by Fiat in Turkey (excluding utility vehicles), proof that this model is crucial for the Turkish market.
- On the other hand, for the European market, the Fiat Tipo is not at all a crucial model, because within the Stellantis group, there are many C-segment sedans (Peugeot 308, Opel Astra, Citroën C4, Citroën C4X) and the Tipo has stopped being sold in certain markets such as France. Now nine years old, it is in the process of being phased out in all European markets. But the Tipo will continue its career in Turkey or will be renewed in the near future. The question is whether Stellantis will launch a new Fiat C-segment sedan in other European markets.
Many Chinese models arrive in Europe under Italian brand
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Many Chinese models arrive in Europe under Italian brand
- Several models of European brands and marketed in Europe are imported from China such as the BMW iX3, Citroën C5X, Cupra Tavascan, Dacia Spring, DS 9, Lotus Eletre, Mini Cooper E, Mini Aceman, Polestar 2, Polestar 3, Polestar 4, Smart #1, Smart #3, Volvo EX30 and Volvo S90. But more and more Chinese models are also arriving with Italian brands.
- Which Italian brands are using this strategy?
- DR: Italian brand specializing in the import of Chinese cars into Italy, adapting them to the Italian market in terms of gasoline-LPG engines. Its models are based solely on Chery models: the DR1 derived from the eQ1, the DR3 derived from the Tiggo 3X, the DR5 derived from the Tiggo 5X, the DR6 derived from the Tiggo 7 Plus.
- EMC: new Italian brand which markets the Wave 3 derived from the Chery Tiggo 5X and the Wave 2 derived from the Geely Livian X3 Pro.
- EVO: DR brand dedicated to entry price cars, such as the EVO 3 which is derived from the JAC Refine S2, the EVO 4 derived from the JAC Refine S3, the EVO 5 derived from the Beijing Chery Tiggo 8 Pro.
- ICH-X: new brand from DR which proposes the creative Chinese all-terrain ICH-X K2 derived from the Beijing BJ40 Plus.
- Sportequipe: Premium brand from DR which offers the Sportequipe 5 derived from a Chery Tiggo 5X, the Sportequipe 6 derived from a Chery Tiggo 7, the Sportequipe 7 derived from a Chery Tiggo 8, the Sportequipe 8 derived from a Chery Tiggo 8 Plus.
- Cirelli: new Italian brand which markets the Cirelli 2 (Beijing X3), the Cirelli 3 (SWM G01), the Cirelli 4 Beijing X6), Cirelli 5 (Forthing T5 Evo) et Cirelli 7 (Forthing U-Tour).
- We note that the Chinese brands selected are numerous even if the Chery brand seems dominating. In 2024, 8,000 units will be sold per month compared to 6,000 in 2023. Note that all of these vehicles have thermal engines (petrol or petrol-LPG).
German exports to China have fallen since 2019
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German exports to China have fallen since 2019
- Unlike France, Germany has been massively exporting automobiles to China since 2010, with a volume of exports having exceeded 200,000 units per year from this year.
- After 2010, German exports to China increased to 250,000 units per year in 2011, 2014 and 2016 and then reached 265,000 units in 2017, before increasing to 325,000 units in 2018 which marked the peak of exports.
- After 2018, the trend reversed and the volume of German exports fell to less than 300,000 units from 2020 and then to less than 250,000 units in 2023. This turnaround is mainly explained by the fact that German cars which were previously exported to China are now produced on the Chinese soil for local demand (more than 4 million in 2023). In addition, Chinese customers are increasingly moving towards Chinese brand cars and are gradually losing interest in imported foreign cars, especially with the development of the BEV market.
- According to Inovev, German exports to China will continue to decline over the coming years because there are no factors predicting a change of Chinese customers regarding their purchases.
- Regarding Chinese automobile exports to Germany, they have fluctuated relatively since 2005. After a peak of 93,000 units in 2007, they gradually fell to 22,000 units in 2013 before rising to 57,500 units in 2017. It is especially since 2021 that they have been growing steadily: 56,000 units in 2021, 71,000 in 2022 and 82,000 in 2023. According to Inovev, these exports from China to Germany will continue to grow over the coming years.
With the Epiq, Skoda attacks the electric market from below
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With the Epiq, Skoda attacks the electric market from below
- Skoda presented its new small battery electric B-segment SUV, named Epiq, which will be marketed next year. This model is shorter than its thermal engine counterpart, the Kamiq, as it measures 4.10 m compared to 4.25 m for the Kamiq. In fact, the Skoda Epiq will be the same length as the Fabia B-segment sedan (thermal engines only).
- Announced for around 25,000 euros (before bonus deduction), the new Skoda Epiq is one of these long-awaited new battery electric small models because they are marketed at a more reasonable price than the battery electric models sold today in Europe. The excessively high price of these vehicles constitutes one of the obstacles to the development of BEV market in Europe. Since the beginning of 2024, sales of this type of vehicle have stagnated in Europe at 13% market share, while the European regulation of April 19, 2023 only authorizes from 2035 the registration of zero emissions vehicles and alternatively ones operating exclusively with CO2 neutral fuels.
- Luckily, carmakers are preparing the launch of BEVs sold at a price of between 20,000 and 25,000 euros (before deduction of bonuses). The new Citroën e-C3 starts at an announced price of 23,300 euros, or 19,300 euros bonus deducted. The future Fiat Panda presented in July 2024 should be sold at a similar price. The future Volkswagen ID2 which will share its platform with the Skoda Epiq will be in the same price range. The Renault 4 and 5 E-Tech are announced at very competitive prices. As for the future Renault Twingo E-Tech, it could be offered at a price close to 20,000 euros (before deduction of the bonus), thanks to its Franco-Chinese design.
- The Dacia Spring is currently priced at 18,400 or 19,900 euros depending on the version, but it is no longer eligible for the ecological bonus. This is the cheapest battery electric car on the market today. A Leapmotor T03 is priced at 25,900 euros and it is not entitled to the bonus either as long as it is imported from China (a production in kits, SDK – Semi Knocked Down –, seems planned in Tichy in Poland, but with however an uncertain guarantee to benefit from the bonus, at least in France).
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