Li Auto Combines Retail and Delivery Units Amid Challenges in Meeting Sales Goals

Li Auto, whose first-quarter performance didn’t meet expectations, is making 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 securing orders and conducting test drives, and their compensation wasn’t affected by when the customer actually collected the car. On the other hand, the delivery team was assessed on their delivery rate, which could be negatively affected by customers delaying collection of their vehicles. This sometimes led to the delivery team encouraging customers to cancel and reorder when they were ready to collect, which could adversely affect the retail team’s performance.

The merger of the retail and delivery teams aligns their objectives, which could stimulate Li Auto‘s overall sales growth. The company originally aimed to sell 800,000 units this year but has revised this down to 560,000-640,000 units due to delivery 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 issues since MEGA’s listing, Li Auto has initiated a matrix organizational upgrade, shifting focus from various departments to a “Product and Strategy Group”. This move sees Li Auto‘s leadership focusing more on product development and operational efficiency.

An internal R&D staff member 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, enabling the company to adapt to market changes and solve problems quickly. As Li Auto navigates this adjustment period, further structural changes may occur.

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