Great Wall Motor has brought in talents with direct store management experience, including a former retail director at , according to local media.

(Image credit: CnEVPost)

Chinese auto giant Great Wall Motor is reportedly gearing up to open direct sales stores to allow its new energy vehicle (NEV) models to reach a more affluent customer base.

Great Wall Motor is internally exploring the option of setting up direct stores for its NEV models and has already started recruiting talent, local media outlet LatePost said in a report today, citing several people familiar with the matter.

The company has brought in a number of talents with direct store management experience, including Fung Fuzhi, who was once retail director at Li Auto, said a person familiar with the matter.

Great Wall Motor's NEV direct sales program is still in the strategy development stage, with no concrete moves at the execution level, the LatePost report noted.

Great Wall Motor's five brands launched a total of 10 NEVs in 2023, but its existing dealer network is mostly located in China's low-tier cities and non-core areas of high-tier cities, which is not conducive to the expansion of its NEV sales, the report said.

The carmaker has tried to push dealers to participate in building stores in shopping malls over the past few years, but so far the transition has not been as effective as expected, LatePost said.

Great Wall Motor has opened many positions related to building direct stores, including director of retail operations, retail store manager, delivery manager, brand designer, and direct retail trainer, according to the report.

The number of retail store manager positions is around 100, which means that the first number of direct NEV stores planned by Great Wall Motor could be around 100, the report noted.

Given the need for brand exposure, most of Great Wall Motor's direct NEV stores will be sited in city landmarks, shopping malls or commercial complexes, LatePost said, citing several people familiar with the matter.

Regarding the brands and models to be sold in the stores, Great Wall Motor is still exploring internally and the plan is not yet complete, according to the report.

Great Wall Motor currently has more than 1,000 4S (Sale, Spare part, Service, Survey) stores in China, and almost all of its roughly 1.23 million unit sales in 2023 came from dealerships, according to LatePost.

The relationship between traditional car companies and dealerships is delicate during a period of market change.

If an automotive brand builds its own directly-managed system on top of its existing dealership system, it will inevitably touch dealers' interests, causing the latter to be wary or even opposition, the report noted.

To minimize resistance, Great Wall has considered setting up direct NEV sales outlets starting with the Wey brand, which had sales of about 41,600 units in 2023, the lowest of Great Wall Motor's five brands, according to LatePost.

Additionally, the Wey brand does not currently have a separate dealer network and shares a sales network with the Tank brand, the report noted.

Great Wall Motor briefly tested direct NEV sales in Guangzhou from 2020 to 2021 and also tried unsuccessfully to open direct stores in Beijing in 2023, LatePost said, citing several people familiar with the matter.

The carmaker may learn from previous lessons and re-structure its direct sales system to try to keep up with the fast-changing market, the report said.

Great Wall Motor's local counterpart (OTCMKTS: BYDDF) also relies heavily on dealerships for its sales, but it has adopted a direct sales model for both its Yangwang and Fang Cheng Bao sub-brands to better maintain user relationships.

Most of China's local new carmakers have adopted a direct sales model, though some, like (NYSE: XPEV), are making more of an effort to bring in dealers to increase their flexibility in sales.

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