Xpeng plans to add 500 integrated stores with sales and service functions, 1,000 experience centers and satellite stores over the next three years, according to local media.

(Image credit: CnEVPost)

After local media reported earlier this week that Xpeng (NYSE: XPEV) would increase the percentage of dealership stores, a new report provides more details.

Xpeng hosted a dealer conference on September 2, which was attended by more than 150 dealers including people from more than 50 of China's top 100 dealer groups, according to a report today from LatePost.

The electric vehicle (EV) maker's goal was to recruit dealers, and of the attendees, about 75 percent of the dealer groups had already applied to Xpeng for authorization to open stores, according to the report.

To date, Xpeng has received a cumulative total of nearly 1,000 authorization applications. In September and October, the company expects to complete the review of more than 100 authorized stores and add 150 new authorized stores will be added during the year, the report said.

Xpeng launched its "Jupiter Project" at the conference, hoping to attract large group dealers to its sales system, according to the report. Jupiter is the planet with the strongest gravity and most satellites in the solar system.

Xpeng president Wang Fengying said at the conference that the company's sales goal for the next three years is to reach 1 million vehicles, according to LatePost. The report is slightly vague, but it should refer to annual sales of 1 million, as Xpeng sold 258,710 vehicles in the full year of 2022.

He Xiaopeng, Xpeng's chairman and CEO, said in April that a car company's ability to survive the next 10 years would be determined by whether it could reach 3 million annual sales.

Ms. Wang, previously president of Great Wall Motor, officially became president of Xpeng on January 30, where she was responsible for product planning, portfolio management and sales operations.

She has years of experience managing dealerships during her time at Great Wall Motor and can make the dealership model deliver the results of the direct model, LatePost quoted a Great Wall Motor source as saying.

Sixty to 70 percent of the dealers in Great Wall Motor's sales network have been around for 20 years, according to the report.

Wang said Xpeng plans to build 500 integrated stores with sales and service functions, 1,000 experience centers and satellite stores over the next three years, according to the report.

Xpeng adopted a direct sales model at its inception, with the first 20 stores being directly managed.

In April 2019, a month after the company's first production vehicle, the G3, was delivered, it announced at the Shanghai auto show that it was opening up for dealerships and service providers to join.

Since then, Xpeng's sales system has consisted of both directly managed and dealer stores. Xpeng's model of cooperation with dealers is order-based sales, with no inventory at dealers and uniform retail prices.

On September 11, Jiemian reported that Xpeng was phasing out inefficient directly-managed stores and expanding the number of dealer stores.

Xpeng opened up the franchise authorization for dealers in July this year. Some of its directly operated stores will be transferred to dealers, but it will not eliminate the direct-sales model, and those that perform well will remain, LatePost said today, citing several people familiar with the matter.

Xpeng's distribution network had 411 stores as of June 30, the company said in its second-quarter earnings report on August 18, without disclosing a breakdown of direct and dealer stores.

As of early this year, Xpeng had 126 dealer stores and 294 directly operated stores. Next, it will shift to a more dealer-oriented model, according to LatePost.

If Xpeng adds 150 new authorized dealer stores this year, it is expected to end the year with more than 276 dealer stores, the report said.

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