- Li Auto has withdrawn a new sales system that had been in place for less than six months amid intensifying market competition and short-term sales pressure.
- Li Auto's main L-series EREVs saw delivery volumes drop by 40 percent to 53 percent year-on-year in July.
Li Auto (NASDAQ: LI) has reportedly adjusted a new sales system that had been in place for less than six months amid unprecedented pressure from competitors.
The automaker has withdrawn a system implemented earlier this year that divided its sales network into five regions, reverting to a province-based sales structure, according to a report by local media outlet 36kr today.
Li Auto's previous sales network was divided into 26 regions based on China's major provinces, with each province independently setting its own sales targets and strategies.
In March, Li Auto merged the 26 regions into five "war zones" -- East, West, South, North, and Central -- with each zone responsible for its own sales volume, profit, and NPS (Net Promoter Score), according to the report.
The advantage of this system is that sales teams in each province can tailor their strategies to local conditions, but on the other hand, it has led to competition for orders between different regions, the report noted.
Now, with market competition intensifying further, Li Auto has reinstated the provincial team sales system that helped it achieve rapid growth, under pressure from short-term sales targets, the report noted.
Li Auto began adopting a provincial-level direct sales system in April 2023 and delivered 376,000 vehicles in the same year, the highest among China's EV startups.
In 2024, Li Auto's annual sales exceeded 500,000 units for the first time.
Following the latest adjustments, Han Xi, the former head of the Central region, has been reassigned as head of retail, according to 36kr.
To provide more support to the sales system, Li Auto has established two new first-level departments: marketing, and sales and service operations, according to the report.
The restructured sales and service system remains under the leadership of the company's president, Ma Donghui, according to the report.
Li Auto has seen a decline in sales this year, as its mainstay L-series models have underperformed. The Li i8 electric SUV, which was launched last month, faced poor initial acceptance upon its market debut.
The L-series models -- Li L6, Li L7, Li L8, and Li L9 -- saw year-on-year delivery declines ranging from 40 percent to 53 percent in July, according to data compiled by CnEVPost.
The Li Mega MPV (multi-purpose vehicle) delivered 2,816 units in July, marking the second-highest monthly figure on record, but accounted for 9.16 percent of Li Auto's monthly deliveries.
The Li i8, launched on July 29, is Li Auto's second battery electric vehicle (BEV) model following the Li Mega. On August 5, the company re-launched the model, reducing the available versions from three to one and lowering the price.
Li Auto will begin deliveries of the Li i8 on August 20. Yesterday, the company said that its target is to deliver 8,000 to 10,000 units of the electric SUV by the end of September.
In the first seven months of the year, Li Auto delivered 234,669 vehicles, a year-on-year decrease of 2.21 percent, according to data compiled by CnEVPost.
