Tesla is considering adjusting its retail strategy in China

Two people familiar with the matter said that Tesla is reassessing the way it sells its electric vehicles in China, its second-largest market, and is considering closing some luxury shopping malls in cities such as Beijing. Exhibition halls, after all, these cities have not had as much traffic as before during the epidemic.


They said Tesla is placing more emphasis on lower-cost suburban stores that will also provide repairs to customers, fulfilling Musk's promise to improve service for existing customers.


One of the sources said Tesla is looking to ramp up its hiring of technicians and other service workers in China. Tesla's Chinese recruitment website shows that as of Thursday, they still have more than 300 vacancies for service positions.


Musk said on Twitter last week that he had made "promoting Tesla's service even better" a priority, responding to a complaint from a prospective owner in Texas who had been waiting a month to pick up his car.

Tesla did not immediately respond to a request for comment.

Tesla sold 400,000 Chinese-made Model 3 and Model Y vehicles in the first eight months of this year, 60 percent of which were domestic sales, a 67 percent increase from last year, according to the Passenger Association.


At present, Tesla China has become the second largest electric vehicle brand in China after BYD. Of course, the two market strategies are not the same. Now that it has established its brand in the world's largest auto market, it must cultivate customer loyalty, one analyst noted.


Yale Zhang, managing director of Shanghai-based consultancy Automotive Foresight, said: “There is no need to set up showrooms in expensive shopping malls, especially when the repair business becomes profitable. Just keep a store in the city center. Two showrooms to maintain the brand positioning, it makes more sense to move more showrooms to the suburbs.”


According to public information, Tesla opened its first store in central Beijing in 2013. There are currently more than 200 stores across the country, displaying models and arranging test drives for potential buyers. However, at least more than half of the stores will not. Provide repair services, including Tesla's first store in Beijing and its first store in Shanghai.


According to statistics on Tesla's official website in China, Tesla has set up showrooms in seven of the country's largest cities, including Shenzhen and Chengdu, more than half of which are in downtown areas, where rents are extremely expensive.


Reuters could not determine how many downtown showrooms Tesla is considering closing, or how many new stores it will open in the suburbs, or how much the transition would cost.


Tesla's electric vehicle rivals in China, including BYD and Xpeng Motors, have taken a different approach to retail distribution. In addition to self-operated stores, other car companies rely more on third-party dealers and 4S stores. It is similar to Weilai, but Weilai pays more attention to door-to-door service and dispatches workers to pick up the car for maintenance. After the work is completed Before giving the car away, each of these strategies has advantages.

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