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Nishant Mittal

Entrepreneur, musici... • 7d

Xiaomi is now worth more than BYD because of the launch of its new SUV. Interestingly, when Xiaomi had begun its journey, it was deemed as the “Apple of China”. In true Chinese spirit, it used to copy everything Apple did at the speed of thought, only to then bring it to the world at a much better cost. That was Xiaomi’s trajectory, ever since it started in 2010. But now, 15 years later, while the rumours of “Apple Car” didn’t turn out to be true, Xiaomi has been able to launch itself as a proper carmaker. With a market cap of $187B, it's moved passed even BYD ($144B) - the original Chinese car giant. Does this mean Xiaomi has finally come out of the shadows of its American idol? I think, yes. There shouldn’t be any doubts about that. What’s worth analysing is what this means for the future of the car market of the world, and more importantly - India. Sooner or later, these Chinese companies will enter our home market. How would India react to that? We don’t appreciate enough how our automotive industry (worth $240B in yearly sales) has literally “shaped” our country. With over 30 Million jobs and over 7% in GDP contribution (49% of the entire manufacturing), India's automotive sector has been the giant tide that has lifted a lot of boats. But is it strong enough to fight the Chinese trouble? Clearly, European and Japanese car companies didn’t prove to be as strong as the world thought they were. Ever since the Chinese industry propped up, they’ve all been sweating bullets. Would Indian companies be any different? Some numbers. India sold about 40 Lakh cars last year, 3.5 Lakh last month. We are the third largest car market in the world. But China? It’s a different beast. They sold about 3.2 Crore. And their home player - BYD - has moved past Tesla, having done to its American Idol what Xiaomi did to Apple, very successfully. With that kind of a grip on their home market (largest in the world), Chinese companies are now obviously looking at dominating the rest of the world. Germany, Japan are wetting their pants, and soon US will too. What do you think will happen here? Also, no matter who makes the electric cars, China wins. They have an ironclad grip on the battery ecosystem, thereby controlling everything. From the mining of the rare earths, to refining of them; the whole electric vehicle ecosystem is their playground. With the recent blockade of rare earth magnets (a tiny part of the manufacturing play), they even showed the world who's boss. It was just a muscle flex intended to show the kind of leverage they have, so the trade folks don't try to screw with them. And it worked. Does India have an answer to that? In case it's not clear, I am alluding to the fact that "outcomes in business are mostly the results of political will". BYD, Xiaomi, Bytedance, et al didn't just grow because of "great entrepreneurs", they grew because of the unmistakable support of the ruling regime. And now they're here. India will need to be very careful.

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