Nio is finally getting all-in on selling cars, making adjustments to its organizational structure, customer engagement, and sales team management to boost sales, according to local media.
(Image credit: CnEVPost)
A slump in deliveries left Nio (NYSE: NIO) with a weak financial performance in the second quarter and forced William Li, the electric vehicle (EV) maker's founder, chairman, and CEO, to emphasize the urgency of increasing sales during the earnings call.
Li mentioned a number of measures, including the fact that Nio is expanding its sales team in line with a 30,000-unit-per-month sales capacity, which he hopes to initially build by the end of September. Now, a new report offers more details on how Nio will boost sales.
Nio has set up a department that is dedicated to the communication of each model and key technologies, local media outlet 36kr said in a report today.
The department, which acts like a marketing middle office, is led by Kang Kai, who was previously the sales head of Nio Shanghai region, and reports to the company's head of product experience, Ted Li, according to the report.
Along with the restructuring of its headquarters, Nio has also made changes in its regional channels, with changes to the staffing and management of its sales team, the report said.
Nio has finally begun to get all-in on selling cars, and William Li, who previously focused most of his energy on the R&D business, has now begun to personally oversee sales, according to the report.
Nio previously had product specialist positions that focused on communicating the brand's philosophy to customers. In early July, the company eliminated that position and shifted them into fellow positions focused on selling cars, according to 36kr.
Salespeople's execution is also being beefed up.
Nio has started offering home test drives extensively this year and has even conducted some out-of-town test drives, the report said, adding that this is demanding more from the sales team in terms of size and capability.
The company kicked off a round of strategic adjustments in early July, covering a number of areas including sales strategy, user journey in car buying, and store staffing system, according to 36kr.
In its sales strategy, Nio began to strengthen its assessment of salespeople by including leads, test drives, and conversion rates in its KPIs and implementing a rolling elimination system, the report said.
Nio has also significantly increased its sales commissions, up to RMB 4,000 ($550) for a single vehicle, the report added.
Nio delivered 23,520 vehicles in the second quarter, down 6.14 percent year-on-year and down 24.23 percent from the first quarter.
Weak deliveries weighed on Nio's financial performance, with revenue coming in at RMB 8.77 billion in the second quarter, falling short of Wall Street analysts' expectations.
In the analyst call after the second-quarter results were announced, William Li spent a lot of time explaining the company's plans to strengthen its sales capabilities.
Nio realized in June that it was lagging behind its competitors in terms of the number of salespeople and their ability to sell, Li said at the time.
Nio is expanding its sales team in line with a 30,000-unit-per-month sales capacity, and hopes to build that capacity by the end of September, he said.
Since July, Nio has been more aggressively expanding its user touchpoints and sales channels and further expanding its sales team across the country, Li said, adding that these initiatives will enhance Nio's sales capacity and drive sales growth.
Despite the current challenging market environment and increasing competition in the EV market, Nio is well-positioned to meet the challenges with its core technology, product layout, sales capabilities, manufacturing and supply chain, he said.
Nio believes the company is capable of focusing on the execution of its marketing and sales strategy to drive a steady increase in deliveries, while further optimizing its cost structure and improving operational efficiency, according to Li.
Nio's test drive numbers hit a record high in August and are now around 10,000 per weekend, a significant increase from June and July, he said.
However, it takes some time to go from test drives to orders, Li added.
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