Xiaomi says EV plans ahead of schedule despite report of declining revenue
Chinese smartphone maker Xiaomi reported a 4 percent drop in sales in the second quarter, due to a shrinking mobile phone market in China. However, the company also said its move into electric vehicle production is ahead of schedule.
Revenue fell to CNY 67.4 billion (nearly Rs. 76,450 crore) from CNY 70.17 billion (nearly Rs. 80,650 crore) in the same quarter a year earlier. However, it beat analysts’ estimates of CNY 65.13 billion (nearly Rs. 74,860 crore).
Net profit rose to CNY 5.14 billion (nearly Rs. 5,830 crore) for the period, up 147 percent from CNY 2.08 billion (nearly Rs. 2,390 crore) a year earlier, also beating expectations. The company attributed the increase to cost savings and efficiency improvements, particularly in its physical stores.
“Despite macroeconomic headwinds in the global market, we continue to expand our presence,” Xiaomi President Lu Weibing said during an earnings presentation.
“Some of our colleagues have already stepped out of certain areas due to this challenging environment, but no matter how difficult it will be, we will strengthen our presence in all regions and markets,” Lu said.
According to Canalys, a consultancy that maps the smartphone market, consumer demand in China’s smartphone market shrank further in the second quarter, with shipments falling 5 percent to 64.3 million units.
According to Canalys, Xiaomi’s shipments fell 19 percent to 8.6 million units, while shipments in its major overseas market India fell 22 percent to 5.4 million units.
Amid falling mobile phone sales, Xiaomi plans to start producing electric vehicles (EVs) after receiving approval from China’s state planner, Reuters reported this month.
The company has committed to invest $10 billion (nearly Rs 82,600 crore) in the automotive industry over the next decade.
Lu said the company’s plans to begin mass production of EVs in the first half of 2024 remain unchanged. “Our current progress is above expectations and above the original production schedule,” he said.
© Thomson Reuters 2023
