Tesla ready to review its business strategy in China – 09/15/2022 at 14:30

(AOF) – According to information from Reuters, the American electric vehicle manufacturer Tesla (-0.13% to 302.20 dollars in pre-market trading) is considering reviewing its business strategy in China. The time of concessions in the big shopping centers of mega-cities like Beijing seems to have passed. The group is instead studying less expensive locations in the suburbs, showing that distribution raises questions in its value chain.

Needham also raised its recommendation to “hold” versus “underperforming” the automaker’s title. The action takes 0.6% before the market.

Tesla is not the only one to question the relevance of its distribution model. A week ago, General Motos told Reuters that to regain the ground lost by its brands – Buick, Cadillac and Chevrolet – on local Chinese manufacturers such as Xpeng, Nio and BYD, it planned to review its distribution by favoring a new direct sales platform called “Durant Guild”, after the founder of General Motors William Durant. GM is considering organizing events (by invitation only) to present potential products as well as opening “experience centers” in major urban centers across the country.


A paradoxical performance

Data from EY highlights that the performance of the world’s top 16 manufacturers was particularly strong in 2021. While the average margin has fallen for three years in a row, from 6.3% in 2017 to just 3.5% in 2020 , this margin stood at 8.5% in 2021. This level is a record for ten years. However, the context was particularly hectic for manufacturers, faced with unprecedented shortages of components. Global sales fell 14% in 2020, the year of the health crisis, to rebound by only 5% in 2021. However, last year, players were able to reap the benefits of their efforts on their fixed cost structure. .


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