Multinational automotive and clean energy company Tesla Inc. is currently reevaluating its sales channels in China, justifiably its second-largest market despite negligible differences in revenue.
Sources close to this development have claimed that the company plans to curtail operations in the more well-known malls in Beijing which witnessed a considerably lower footfall amid restrictions in light of the COVID-19 pandemic.
The primary motive of the transition would be to focus on stores in the comparatively cheaper suburban areas that can also provide them with the advantage of repairs, thereby being in consort with CEO Elon Musk’s vision of prioritizing service for existing customers, wherein they have frequently been displeased with long delays.
As a part of the push, Tesla is steadily attempting to amp up the hiring process for technicians and other service staff in China. Incidentally, the auto giant’s Chinese recruitment website showcased more than 300 service job openings in the region, according to the latest reports.
Unlike most of its rivals, Tesla owns all of its stores instead of relying on dealers. Another strategy adopted by Tesla includes selling its cars on the online platform, which has brought enough time for the company to readjust to a retail strategy that was previously employed by Apple Stores.
Yale Zhang, managing director at Shanghai-based consultancy Automotive Foresight reiterated the company’s belief to focus on customer loyalty and the repair business, rather than opening showrooms in popular localities, as it would be beneficial for the company’s revenue margins in the long run.
Tesla, which opened its first showroom in Beijing in 2013, proudly has 200 stores across China to display models and arrange test drive services for potential buyers in the country. However, most of these outlets do not provide repair services on account of high rent locations and space constraints.
Lately, the American automaker has been wrought with a series of customer complaints and lawsuits in China, including the one that gained severe media backlash on the company’s part for its role in relieving the complainant of malfunctioning brakes.