Chinese tech giant Xiaomi, widely known for its innovative smart phones and home appliances, is focusing on building up and integrating the supply chain in the automotive industry.
Xiaomi entered the new energy vehicle (NEV) market in 2021, building its business to cover all essential automotive production processes like stamping, casting, body welding, painting, battery assembly, and final assembly.
The company has been driving forward with a focus on developing a comprehensive supply chain to support its business.
"Efficiency is the key word here. We look at the efficiency of our entire supply chain, from raw material procurement, to the processing of raw materials, logistics, to vehicle production and ultimately to our customer services. We look at the efficiencies of not only our very direct suppliers, but also then of our indirect suppliers - meaning the suppliers of our suppliers," said Kevin Chen, the company's head of supply chain operations.
The company has also invested heavily in research and development, aiming to integrate artificial intelligence, Internet of Things (IoT) connectivity, and energy-efficient solutions into its vehicles. Industry experts believe this could set Xiaomi apart in the competitive NEV market.
"We put a lot of efforts into building strategic partnerships with key suppliers, say battery technology or sensor development. So there are two ways we have these strategic partnerships. One way is that, we are a tech company at heart, so we invest very heavily into frontier technology research and development alongside with our partners. Another way we do that is we also believe that it is important to align our interests with those of our key suppliers. We have become one of the top investors in some of our key component suppliers," said Chen.
These partnerships and innovations efforts are not just theoretical concepts. Xiaomi, in particular, has been putting these ideas into practice in multiple ways.
"Xiaomi's strength lies in its ability to scale and innovate quickly. It applied its smartphone ecosystem model to the NEV industry, like the philosophy of building entire industrial chains and supplier partnerships. We can see significant disruption throughout the market," said Zhang Baohua, director of the company's vehicle manufacturing unit.
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Chinese NEV maker sets sights on integrating automotive supply chain
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Chinese NEV maker sets sights on integrating automotive supply chain