Amid Xpeng's internal concerns and distributor resistance, its wholesale sales model has only been tested on a small scale so far, according to local media.
Xpeng's (NYSE: XPEV) sales team is seeing new staffing adjustments, and the pivot to a more dealer-dependent model appears to be facing challenges, according to a new report.
Former Xpeng vice president of financial platform operations and management Gu Yuanqin has taken on the role as the company's head of sales, taking over the duties of previous head of sales Wang Tong, local media outlet Jiemian said in a report today, citing multiple sources.
Prior to joining Xpeng, Gu, 63, had helped develop Xpeng's lane-level navigation and positioning system at his previous company, the report noted.
Wang, who was previously in charge of key account sales operations, became the new head of sales when Xpeng's direct and distribution systems merge in 2023. He has moved to head up the president's office operations, according to Jiemian.
Xpeng had also tried to increase sales in the past few months through sales channel adjustments, including requiring dealers to purchase a certain number of vehicles each month, but that strategy is facing challenges, according to Jiemian.
The electric vehicle (EV) maker used a direct sales model at its inception, with its first 20 stores being directly managed.
In April 2019, Xpeng began allowing dealers and service providers to join. After that, its sales system consisted of both direct and dealer stores.
In September 2023, Xpeng launched the Jupiter Project, hoping to attract large group dealers into its sales system.
On March 6, local media outlet LatePost reported that Xpeng began requiring dealers to purchase half of their targeted vehicle sales each month.
Amid internal concerns and resistance from dealers, the wholesale model has so far only been tested on a small scale, making it difficult to roll out nationwide, Jiemian said in a report today, citing several independent sources.
Inventory of new energy vehicles (NEVs) is more difficult to handle than traditional combustion-engine vehicles, the report said, citing a source close to an investor in the Xpeng dealership.
At the end of last year, a Shanghai-based dealer purchased more than 400 new cars as inventory to help Xpeng meet its monthly sales target, but the cars have yet to be sold out, the report said.
Unlike the seven-year-long changeover time for fuel vehicles, NEVs' hot selling time lasts only six months, the report noted, adding that the faster pace of carmakers' new model launches has resulted in dealers' inventory of vehicles quickly lagging behind market demand.
Meanwhile, Xpeng's internal concern is that dealers with inventory will cut prices and promote under volume pressure, thus disrupting the pricing system, according to the report.
In addition, Xpeng's head of marketing position is about to be filled after being vacant for four months.
On May 21, Tencent News reported that Yu Tao, head of marketing for smartphone maker Oppo's OnePlus brand, may be joining Xpeng as vice president of marketing in the near future.
Yu will be responsible for marketing, public relations and communications, reporting to president Wang Fengying, according to Tencent News.
Xpeng's previous vice president of marketing was Yi Han, who had led marketing for Geely, Volvo, Lynk & Co, Smart and Radar brands. He left Xpeng in January and returned to Smart as CEO of China region.
Xpeng's sales expectations for the year are 280,000 units, which means it will need to average more than 30,000 units per month for the rest of the year, Jiemian's report said.
That's a challenging target for Xpeng, which has yet to get back above 10,000 units per month during the year, the report noted.
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