The 2024 Beijing Auto Show is over, but the "Lei Jun effect" is far from over.

At the 2024 Zhongguancun Forum Annual Meeting held recently, Lei Jun said when talking about why Xiaomi only makes one car, "Every car manufacturer makes a series of cars, and it is enough to have a few good cars. Why do you need so many homogeneous cars?" He said that he was quite desperate after watching the auto show, and believed that the competition in the automotive industry was in homogeneity. "You are not making products at all, you are just relying on guessing."

Xiaomi CEO Lei Jun speaks at a press conference at the Beijing Auto Show on April 25, 2024.

After seeing these rather straightforward remarks, traditional car people fell silent, and "Mi fans" became excited again.

From a third-party perspective, Lei Jun's remarks match his actions and the interests of the company behind him. Of course, his views themselves are not without reason.

With the advancement of technology, the car manufacturing cycle is shortened, and the technical threshold of the automotive industry is being lowered, making it easier for many new companies to enter the market. However, looking at the products of the current new forces, they are nothing more than comfortable configurations such as sofas, refrigerators, and color TVs, smart cockpits based on voice control, and automatic assisted driving systems that are not worthy of their name.

In fact, as the industrial chain matures, building a car for an emerging company is like a "buffet" model, where everyone picks dishes from a plate to make a hodgepodge, so the cars they build are all similar.

In the traditional automobile industry, powerful automakers do not want to miss any market segment, so they have to use a long product line to "occupy every niche." Unlike the homogeneity of new forces in terms of configuration and computing power, the homogeneity of traditional automakers is reflected in the fact that they can pick out a large number of similar products from different brands in every "pit."

Whether it is configuration volume or category homogeneity, this approach may bring a certain amount of attention in the short term, but the attention will always shift to latecomers. In the long run, it will weaken the core competitiveness of car companies and may even lead to market saturation and consumer aesthetic fatigue.

When homogeneity reaches the "saturation stage", car companies often adopt a low-price strategy to lower prices by reducing costs to attract consumers. However, this approach often sacrifices the company's motivation for product quality and innovation, resulting in a large number of "cheap but poor quality" products flooding the market.

Therefore, Lei Jun's point of view is not wrong. In the past two years, car companies have been trying their best to open up blue oceans. Niche markets such as hardcore off-road/pickup trucks and RVs have become a must-fight for car companies, not to mention the conventional sedan and SUV markets.

Although Lei Jun's Xiaomi Auto is an "outsider", it is also because of this that it can break away from the traditional car-making thinking. New players may not have nothing to learn. Take Xiaomi SU7 as an example. Its benchmark is Tesla, and it is a coupe. The open interface used inside keeps the car interior simple while giving users more choices. This is consistent with Lei Jun's point of view - make the car as simple as possible, and let users choose accessories to meet their needs. Few car companies can think of these positioning and efforts of SU7.

Lei Jun even proposed the idea of "Can we unify the interface" when communicating with car company bosses at the auto show, which once became a hot topic. For example, when Lei Jun was communicating with Wei Jianjun, chairman of Great Wall Motors, he proposed the above suggestion, and the latter said he would consider it.

The bigwigs at the Beijing Auto Show communicated frequently, but most of them were just nodding and bowing. The communication between Lei Jun and Wei Jianjun was quite sincere. Lei Jun praised Great Wall Motors for its excellent product category innovation. Combined with Lei Jun's point at the beginning, this also explains why he has a "special liking" for Great Wall.

Looking at the product line of Great Wall Motors, the pickup series is undoubtedly the "leader" of small county towns. Although the Ora series also means "paying tribute" to classic models, Great Wall has made the classics more down-to-earth, and various "Cat" series have become the scenery on city streets. Not to mention the Tank series, which has long surpassed the status of "substitute for the G-Class" and cultivated its own off-road circle.

In addition to his disapproval of the automotive industry, Lei Jun's remarks are also for the benefit of his own company. Xiaomi plans to mass produce 70,000 units of SU7 in 2024, but the orders have already reached 80,000 units, which means that Xiaomi's production capacity this year cannot digest the current orders. Therefore, Lei Jun will not consider rapidly expanding the product line in the short term, and will only focus on delivering SU7.

In our opinion, Lei Jun's remarks have a deeper warning effect. Homogeneous internal circulation means internal friction among domestic automakers, and truly successful automakers should go global and go to overseas markets to roll up overseas brands. Looking at top global automakers such as Volkswagen and Toyota, their domestic sales in Germany or Japan only account for a small part of their global sales.

Although Europe and the United States are currently using various means to curb Chinese automobile imports, if Chinese automobiles want to become truly powerful, they still need to adhere to the overseas strategy and hone their wings.