Previously, 90 percent of Avatr's stores have been converted from directly-managed stores to dealerships, with only a few directly-managed stores remaining in a few cities.

Avatr Technology, an electric vehicle (EV) brand backed by Changan Automobile, CATL, and Huawei, has reportedly canceled its only remaining directly-managed stores and shifted to a full dealership sales model.

Avatr's last directly-managed stores in Beijing will soon all switch to a dealership model, local media outlet Jiemian said in a report today.

Previously, 90 percent of the company's stores had been converted from directly operated to dealerships, with only a few directly operated stores remaining in a handful of cities in Beijing, Shanghai, Guangzhou and Chongqing, according to the report.

Avatr's previously built self-operated after-sales service team was completely laid off at the beginning of the year, with after-sales service being done by Changan's dealers, as with Changan's other brand Deepal, according to the report.

Notably, The Beijing News later cited Avatr as saying that the company is not abandoning the direct sales model, but is pushing for both models to play to their respective strengths.

Avatr was initially set up as Changan Nio by Changan and Nio on July 10, 2018. Nio has now substantially exited from the company, holding less than 1 percent stake.

The company had previously adopted a hybrid sales model of direct stores alongside dealerships. For after-sales, Avatr's own team provides service at the dealer's stores.

In 2022, about 30 percent of Avatr stores were directly operated and the other 70 percent were dealer stores, according to Jiemian.

Starting in 2023, Avatr attempted to utilize more outside forces to sell cars and entered Huawei stores in February of the same year. In July 2023, Avatr signed up more than 30 additional dealers.

In the second half of 2023 alone, the number of Avatr outlets increased by about 120, equivalent to 80 percent of the entire dealership network at the end of 2022.

In April of this year, Avatr announced that it would add another 120 outlets throughout the year, with the total expected to reach around 500 by the end of the year.

Avatr's sales performance has been lukewarm, however, with only 27,600 vehicles delivered in the full year of 2023, which was only 27.6 percent of the full-year delivery target of 100,000 vehicles, according to Jiemian.

Avatr's net loss for the full year of 2023 widened 83 percent year-on-year to RMB 3.69 billion ($500 million), Jiemian's report noted, adding that it has accumulated net losses of RMB 6.07 billion over the past four years, counting from the start of Avatr's restructuring in 2020.

Changan chairman Zhu Huarong himself became Avatr's chairman at the end of 2023, when rumors surfaced that Avatr would convert its directly-managed stores into dealer stores.

In April, Avatr began channel changes. By June 15, those adjustments were essentially over.

Regardless of which sales model is adopted, the key is to provide the best user experience as well as improve efficiency, Avatr vice president Wang Jinhai said in a recent interview with another local media outlet Yicai.

For Avatr, it gets Changan's support in sales channels, which can ensure the customer experience while solving the asset-heavy issue of the direct-sales system, Wang said.

($1 = RMB 7.2673)

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