The closure of its first store in China could be somewhat symbolic for Tesla's sales and channel expansion model here, a local media report said.
(File photo. Credit: CnEVPost)
Tesla has closed one of its stores in downtown Beijing, its first offline store in China, local media outlet Jiemian reported yesterday.
Calls to the store, located in Beijing Parkview Green in Chaoyang district, are now being routed to a nearby Tesla store in Raffles City, according to the report.
The store pulled out two weeks ago because the lease had expired and was not renewed, Jiemian said, citing a Tesla salesperson.
Tesla's store in Beijing Parkview Green opened in 2013 and was renovated and expanded in 2018, the report noted.
Closing its first store in China could be somewhat symbolic for Tesla's sales and channel expansion model here, the report said.
Information on Tesla's China website shows that the company currently has 17 experience stores in Beijing.
On September 15, Reuters reported, citing two people familiar with the matter, that Tesla was re-evaluating its sales approach in China, considering closing some of its shopping mall showrooms in cities like Beijing, and would place more emphasis on suburban stores that are lower cost and can offer repair services.
At the time, Tesla responded that the sales channel in China was still in its normal expansion.
Tesla currently has more than 200 stores in China, and more than half of them do not offer repair services because they are located in high-rent locations where space is limited.
"It's not necessary to open showrooms in expensive shopping malls, especially when the repair business has become lucrative," said Yale Zhang, managing director of Shanghai-based consultancy Automotive Foresight, as quoted in the Reuters report in September.
Tesla's revenue from China in the third quarter was $5.13 billion, or 23.92 percent of its total revenue for the quarter, according to a Form 10-Q dated October 24.
That was up 64.82 percent from $3.11 billion in the same quarter last year and up 35.49 percent from $3.79 billion in the second quarter.
Tesla's total revenue in the third quarter was $21.45 billion, with the US market contributing $10.24 billion, or 47.73 percent.
The company lowered the prices of its entire Model 3 and Model Y lineup in China on October 24.
It sold 83,135 China-made vehicles in September, including 5,522 for export and 77,613 for delivery to local consumers.