Li Auto has merged its sales and delivery teams to eliminate possible conflicts of interest between the two in order to better sell cars.
Li Auto (NASDAQ: LI) has reportedly made significant changes to its sales and delivery systems as part of a team restructuring that is still underway.
Li Auto has merged its retail and delivery teams to form a new, larger sales team to better focus on selling cars, local media outlet Meiren Auto reported today.
The realignment could be related to friction between the retail and delivery teams, the report said, citing a person close to Li Auto, adding that previously the two teams faced different performance appraisal requirements, which adversely affected sales.
After the merger, the objectives of the two teams have converged, which is more conducive to overall sales growth, the person said.
The creation of separate teams for sales and delivery is a new model brought in by Tesla (NASDAQ: TSLA) after it entered China in 2013, which has been adopted by local automakers including Li Auto, Nio (NYSE: NIO) and Zeekr (NYSE: ZK), the report noted.
The performance requirements for retail and delivery teams are different, with the former using the number of cars sold as a KPI (key performance indicator), while the delivery team is assessed on delivery rate, the report said, citing a Li Auto salesperson.
The delivery team wants customers to pick up their cars as soon as possible, but some customers may delay taking their cars home for various reasons.
Customers who don't get their deliveries in time may be advised by people in the delivery team to back out of their order and reorder it next month, which can affect the sales team's performance, the report said, citing the Li Auto salesperson.
The merger of the two business teams will help with internal communication and coordination to maximize synergies and combine efforts to sell cars, the report said.
Li Auto's weak performance after the launch of its first battery electric vehicle (BEV), the Li Mega, and the challenges faced by its L-series extended-range electric vehicle (EREV) models since the beginning of the year have prompted the company to restructure its teams.
Li Auto is in the midst of a new round of layoffs, with more than 18 percent of the overall workforce potentially involving more than 5,600 people, local media outlet 21jingji said in a report on May 16.
On May 20, Li Auto's management said in its first-quarter earnings call that the company has faced multiple challenges this year due to changes in its internal and external environments, and that the company's performance in the first quarter fell short of its expectations at the beginning of the year.
In the face of the problems, Li Auto made quick adjustments, initiating organizational upgrades and process optimization to improve internal operational efficiency and decision-making quality, its management said, without going into further detail.
The company said on the call that the release of three all-electric SUV (sport utility vehicle) models, originally planned for the second half of this year, will be delayed until the first half of 2025.
Li Auto's current product array includes the Li Mega, Li L6, Li L7, Li L8, and Li L9, with the L-series all being EREVs.
The company delivered 35,020 vehicles in May, up 35.8 percent from April and up 23.85 percent year-on-year, according to figures it announced on June 1.
May's deliveries were Li Auto's highest for a single month so far this year, though still well below last December's record 50,353 vehicles.
Some employees at Li Auto Beijing plant reportedly taking extra break as Li Mega sales remain weak
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