Xiaomi's Auto Unit Wins Steel Plaudits While Its Phone Business Sheds Share

Xiaomi is firing on two very different cylinders, and the contrast is hard to miss. On the automotive side, the company is collecting engineering awards and stacking up orders. On smartphones, it is losing ground faster than the market itself — a divergence that investors now have to price in.

Xiaomi Auto confirmed Friday that its 2,200-MPa ultra-high-strength steel took first prize at the Metallurgical Science and Technology Award. Crucially, the material is not a laboratory curiosity destined for some future model: it already features in the YU7, the new SU7 and the SkyNomad, all of which are in series production. A technology prize is neither a revenue line nor an earnings contribution, but the fact that the steel is already rolling off the line gives the announcement more substance than a pure research headline.

Demand for the new Pengcheng range has been equally eye-catching. According to Technode, Xiaomi reported more than 70,000 binding orders for the first 30 sales days of the line, which covers the N70 and N90 range-extender SUVs. Those are orders, not deliveries — they demonstrate appetite for the range rather than a contribution to the top line just yet.

A buyback, a new colour and a sell rating

Capital returns ran in parallel. Xiaomi repurchased 1,900,000 of its own shares on Friday for a total of HKD 50,770,084, taking the number of shares bought back since the repurchase mandate was granted to 136.112 million. The acquired stock is earmarked for cancellation, the announced next step in the process. That brings the total outlay on the buyback programme to roughly HK$50.77 million for the latest tranche alone.

Meanwhile, Xiaomi's Lu Weibing published official images of a new colourway for the REDMI K100 — "Fluorescent Green" — with the handset's launch set for 27 October. A product date generates attention; whether it generates business is another matter entirely.

Analysts, for their part, are leaning cautious. China Renaissance downgraded Xiaomi from "Hold" to "Sell" on 9 October, according to media reports, with a price target of HK$20.50.

The smartphone numbers are the real test

The case for caution rests on shipment data published about a week ago. Xiaomi's worldwide smartphone shipments fell 29.2% in the third quarter of 2026, while the overall market contracted 22%. In China the picture was similarly grim: shipments dropped 20.4% year on year, against a 15.4% decline for the total Chinese market, according to IDC figures cited by Reuters. Xiaomi thus underperformed its home market — meaning a simple industry recovery would not be enough to prove the company has fixed its own position.

Rising memory chip costs and soft demand sit behind the weakness. Against that backdrop, the automotive progress offers a positive counterweight but no proof that Xiaomi can offset the drag from handsets. The distinction between technical execution, order intake and realised business remains the one that matters.

Winter service rounds out the auto offering

Xiaomi Auto also launched a winter service programme on Wednesday covering eight northern provinces and regions, including free winter inspections and a waiver of labour costs on winter tyre changes. It is an after-sales sweetener rather than a sales driver, and it belongs in a different bucket from the steel award and the order book.

Weighing it all up: a completed buyback documents real capital deployment but says nothing about operational momentum. A new phone colour and a launch date confirm preparation, not commercial success. The 27 October REDMI K100 unveiling is the next concrete checkpoint — it could lay the groundwork for a fresh assessment of the handset business, though it cannot yet guarantee sales. The question for investors is not whether Xiaomi buys back stock, but whether the business can ultimately justify the confidence such purchases imply.