Recently, it was reported by the media that Xiaopeng Motors has recently begun to require dealers to reserve inventory. Several dealers of Xiaopeng Motors have stated that they need to purchase half of their target sales of vehicles from Xiaopeng Motors every month.
Xiaopeng Motors confirmed the authenticity of the news to the Daily Economic News reporter. "Half a month of inventory is to deliver faster, improve efficiency, and allow dealers to sell cars. Domestic dealers generally use two months of inventory, and half a month of inventory is not inventory, but our innovative model of" direct sales+distribution "hybrid." Xiaopeng Automobile told reporters.
Photo by journalist Zhang Jian (source image)
It is understood that at the beginning of its establishment, Xiaopeng Motors adopted a direct sales model to sell cars, and began to relax the dealer franchise model in 2019. Afterwards, Xiaopeng Motors coexisted in both direct sales and franchise models, and established two teams: Auto Trade and User Development Center (UDS). This helped Xiaopeng Motors quickly expand the number of stores in the early stages, reducing the cost pressure of building stores.
However, the two channels mentioned above by Xiaopeng Motors belong to different responsible persons, which leads to system internal friction issues. The chaos of the terminal network is also one of the reasons for Xiaopeng Motors' poor sales performance in 2022. This year, Xiaopeng Automobile sold 120700 vehicles, with a completion rate of only 48.3% for the annual sales target, and the growth rate was also lower than the industry's overall market.
The turning point will occur in 2023. This year, Wang Fengying joined Xiaopeng Motors as the CEO and made significant adjustments to Xiaopeng Motors' channels. In March of that year, the internal organizational structure of Xiaopeng Automobile merged the automotive trade team of the direct sales system and the user development center team of the dealer system to implement unified management. At the same time, the original four major regions of North, East, Central, and South will be adjusted into 24 more subdivided regions.
In September of the same year, Xiaopeng Motors held a channel business meeting and announced a channel transformation plan called the "Jupiter Plan". The plan is still being promoted by Wang Fengying, aiming to gradually replace the previous direct sales model with a dealer model to reduce operating costs and increase market coverage. At that time, the reporter learned that Xiaopeng Motors had reduced its sales area to 12 and was gradually phasing out inefficient direct operated stores and expanding the scale of its dealerships.
In order to recruit more dealer partners, Xiaopeng Motors even lowered the threshold for dealers to open 4S stores. Originally, new dealers who joined the network had to wait for the operator to exceed the sales target for a period of time before they could apply to open a post store. But this restriction has been lifted, and dealers can directly open comprehensive stores with sales and after-sales functions.
According to the recruitment conditions for authorized dealers announced on the official website of Xiaopeng Automobile, the registered capital of the authorized operation company for agent dealers shall not be less than 10 million yuan, and the annual operating revenue of the automotive business sector shall be over 100 million yuan. The investment store must be located in the mainstream automotive commercial district of the city, with an actual usage area of no less than 1000 square meters and a sales exhibition hall area of no less than 300 square meters.
"Franchisees can adopt an agency authorization system, with a unified national price, zero inventory operation, fixed high commissions, and can enjoy store building subsidy support in 2023," said Xiaopeng Motors in the official recruitment announcement.
However, after this adjustment, Xiaopeng Motors has also encountered new problems in its channels. The reporter learned that in the past, some dealers sold multiple brands of cars at the same time, while other car brands had inventory. However, the zero inventory operation of Xiaopeng Motors would result in dealers not fully selling Xiaopeng Motors products. And this is also one of the important considerations for Xiaopeng Motors to propose the idea of dealers storing inventory.
Photo taken by journalist Kong Zesi (data image)
Frequent adjustments to channels or a reflection of sales pressure faced by Xiaopeng Motors. Since entering 2024, the growth momentum of Xiaopeng Motors has gradually weakened, falling below the 20000 vehicle mark reached in previous months. In January, the sales volume was only 8250 vehicles, a sharp decline of 59% compared to the previous month; Sales continued to decline in February, with only 4545 new cars sold.
It should be noted that in 2024, Xiaopeng Motors has set a goal of "doubling its performance" and aims to achieve annual sales of 280000 vehicles. Based on this calculation, Xiaopeng Motors needs to maintain a stable monthly sales target of at least 23000 vehicles this year. But there is a significant gap between the sales performance in the first two months of this year and this expected target.
As stated by He Xiaopeng, Chairman and CEO of Xiaopeng Motors, in an internal letter at the beginning of the year, this year is the first year for Chinese automotive brands to enter the "blood sea" competition, which is also the first year of the "elimination race". In this context, Xiaopeng Automobile's adjustment of dealer inventory may be one of its important measures in seeking to increase brand sales and avoid losing competitiveness in the "elimination race". But the subsequent effects still need to be tested by the market.