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XPeng finishes consolidating sales system to improve efficiency, report says
The management teams of XPeng's direct sales channel and its authorized dealer channel have been combined to reduce unnecessary competition for interest from within, according to local media.
XPeng US | XPeng HK
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XPeng's (NYSE: XPEV) organizational restructuring appears to be continuing, with the latest move completing a major reorganization of its sales system, according to a new report.
XPeng's sales system has recently completed changes in its internal management structure, with the management teams of its direct sales channel as well as its authorized dealer channel being merged, according to a report by local media outlet Jiemian.
The company is one of the rare new Chinese carmakers to have both a direct and dealership system. This approach helped XPeng rapidly expand its number of stores and reduce the cost of building them in the early stages of its development, Jiemian's report noted.
As of the third quarter of last year, XPeng had more than 400 stores, of which about 70 percent were directly operated by the company and 30 percent were authorized dealers. As a comparison, Li Auto and NIO's latest store counts were 296 and 387, respectively, according to the report.
However, these two sales channels of XPeng are managed by different teams and thus have the problem of competing for each other's interests.
XPeng's directly managed stores are under XPeng Auto Trading, headed by co-founder He Tao. Its authorized dealers are managed by the UDS (User Development Service Center) team, headed by chief talent officer and vice president of sales Liao Qinghong.
A previous report by local media 36kr mentioned that at the height of competition between these two teams, XPeng's direct system received a fund, one of the invisible uses of which was to find problems with the authorized dealer system.
Disruptions in the sales network were one of the reasons for XPeng's poor sales performance last year, Jiemian's report noted.
XPeng sold 120,757 vehicles in 2022, meeting only 48.3 percent of its full-year sales target, according to the report.
Starting in January, XPeng began integrating the two different sales systems, a process that was recently completed, Jiemian's report said, citing a source familiar with the matter.
On January 30, XPeng announced that Wang Fengying, formerly president of Great Wall Motor, has been named president of the company.
Ms. Wang will be responsible for XPeng's product planning, portfolio management and sales operations, reporting to the company's chairman and chief executive officer, He Xiaopeng, XPeng said at the time.
After heading sales, Ms. Wang removed XPeng's original big region system and redefined more than 20 sales districts, with direct stores and authorized dealers in each district managed by a single head, according to Jiemian.
The unified management of Xpen'sg directly managed stores and authorized dealers will be able to avoid competition between the two and help reduce the impact on consumers, the source said.
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The price of lithium, a raw material for batteries, has accelerated its decline, with industrial-grade lithium carbonate falling RMB 7,500 per ton to RMB 302,500 per ton today.
New price agreements between Chinese power battery giant CATL and some local automakers are expected to be reached this month, at a time when battery raw material prices continue to fall.
CATL's lithium rebate policy is progressing steadily, and it is now at the practical stage of signing agreements with some car companies, local media Cailian said today, citing sources close to the battery maker.
These agreements are expected to be reached by the end of this month at the earliest, the source said.
CATL's plan was first reported on February 17 by local media outlet 36kr, which said it is not aimed at all customers, but rather at several strategic customers, including NIO (NYSE: NIO), Li Auto (NASDAQ: LI), Huawei and Zeekr.
The core terms of the partnership include that CATL will settle a portion of the price of power battery supply with car companies at a rate of RMB 200,000 ($28,970) per ton of lithium carbonate for the next three years.
At the same time, car companies signing the partnership will be required to commit about 80 percent of their battery purchases to CATL, according to the report.
CATL management first acknowledged the move during the company's earnings call on March 9.
CATL's lithium sharing plan is not for the purpose of lowering prices, but rather the company already has some mineral resources and does not want to reap windfall profits, its management said.
CATL wants to be able to share with long-term strategic customers and is moving forward with communications to that end, the company said.
Prior to that, Li Auto and NIO both said that they had ongoing discussions with CATL when asked about the topic in their respective earnings calls.
CATL's move comes as lithium carbonate has been falling for months.
Today's quotes for industrial-grade lithium carbonate and battery-grade lithium carbonate in China were both down RMB 7,500 per ton, with the latest average prices at RMB302,500 per ton and RMB 340,000 per ton, respectively, according to My Steel.
($1 = RMB 6.9040)
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