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Li Auto combines retail and delivery units amid challenges in meeting sales targets

Li Auto, whose first quarter performance fell short of expectations, is implementing further organizational changes following significant layoffs and a slowdown in production. The company recently merged the roles of its retail and delivery teams into sales, as reported by “Meiren Auto.”

Previously, the performance metrics for the retail and delivery teams were different. The sales team’s KPIs were based on taking orders and completing test drives, and their compensation was not affected by when the customer actually picked up the car. On the other hand, the delivery team was assessed on their delivery speed, which could be negatively affected if customers delayed the collection of their vehicles. This sometimes led to the delivery team encouraging customers to cancel and reorder when they were ready for collection, which could negatively impact the retail team’s performance.

The merger of the retail and delivery teams aligns their goals, which could boost Li Auto‘s overall revenue growth. The company originally wanted to sell 800,000 units this year, but cut this to 560,000-640,000 units due to supply issues.

In the first five months of this year, Li Auto sold 141,200 vehicles, less than 30% of their revised lower target. To meet the adjusted target, they need to sell nearly 60,000 vehicles per month, surpassing their record monthly sales from last year.

In response to problems since MEGA’s IPO, Li Auto has initiated a matrix organizational upgrade, shifting the focus from different departments to a “Product and Strategy Group”. Li Auto sees this move‘s leadership focuses more on product development and operational efficiency.

An internal R&D employee shared with Jiemian News that frequent organizational changes are common within the company, with departments often collaborating or reorganizing based on business needs. This flexibility is seen as a strength, allowing the company to adapt to market changes and solve problems quickly. Like Li Auto If we get through this adjustment period, further structural changes may occur.

SEE ALSO: Li Auto layoffs approach 10,000 employees

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