Lowering costs by 25%, promoting a second brand, expanding channels on a large scale, and entering the sinking market... Xiaopeng Automobile's 2024 year carries the high expectations of He Xiaopeng.
On November 15th, Xiaopeng Motors (09868. HK) released its financial report for the third quarter of 2023. According to the financial report, Xiaopeng Automobile achieved a revenue of 8.53 billion yuan in the third quarter, a year-on-year increase of 25% and a month on month increase of 68.5%; The net loss was 3.89 billion yuan, an increase of 63.6% year-on-year and 38.6% month on month.
In terms of automobile sales, Xiaopeng Automobile delivered a total of 40000 vehicles in the third quarter, an increase of 80.18% year-on-year and 72.4% month on month; The sales revenue of automobiles was 7.84 billion yuan, an increase of 25.7% year-on-year and 77.3% month on month.
In terms of gross profit margin, Xiaopeng Automobile's gross profit margin in the third quarter was -2.7%, a decrease of 16.2 percentage points compared to the same period last year; The gross profit margin of automobiles was -6.1%, a decrease of 17.7 percentage points compared to the same period last year.
Xiaopeng Automobile's cash reserves reached nearly 36.5 billion yuan, an increase of 8% month on month and 2.74 billion yuan compared to the previous quarter.
Looking ahead to the fourth quarter, Xiaopeng Automobile stated that its expected delivery volume reached 59500 to 63500 vehicles, a year-on-year increase of approximately 168% to 186%, and its expected total revenue reached 12.7-13.6 billion yuan, a year-on-year increase of approximately 147.1% to 164.6%.
Based on this delivery guideline, Xiaopeng Motors will maintain a monthly delivery level of 20000 units in the remaining two months of this year, which is on par with October, and is rated as "conservative" by analysts.
Xiaopeng Automobile CEO He Xiaopeng commented in the third quarter that sales, brand, morale, and free cash flow have entered a preliminary positive cycle. In the intelligent manufacturing industry, achieving such a bottoming out recovery is very rare.
The second brand will be launched next year
Xiaopeng Automobile carries the high expectations of He Xiaopeng in 2024. In the view of He Xiaopeng, a major highlight of Xiaopeng Motors in 2024 is the second brand and first model MONA.
At the financial report conference call, He Xiaopeng introduced that in 2024, a highly competitive new model will be launched based on the Fuyao architecture, and plans to launch a brand new brand of 150000 yuan to accelerate sales growth and share expansion in the A-class car market.
The new brand of Xiaopeng Automobile is built on its acquisition of the Didi Intelligent Electric Vehicle Project.
On August 28th, Xiaopeng announced the acquisition of its intelligent electric vehicle project related assets and research and development capabilities from Didi for a total consideration of up to HKD 5.835 billion. Xiaopeng Motors will build an A-level intelligent electric vehicle based on this, with the project code "MONA".
Regarding research and development progress, He Xiaopeng introduced that, Our new brand's first product, the A-class intelligent pure electric sedan MONA, is progressing smoothly in research and development. We expect MONA to be launched in the third quarter of 2024. In my opinion, the MONA model launched next year is just the beginning. Through further technological innovation and extreme cost control, we will also be the first to launch multiple models that support autonomous driving in the most mainstream 150000 yuan or 20000 US dollars level, opening a huge gap with models in the same price range Gap
Regarding the MONA positioning and channels that analysts are generally concerned about, He Xiaopeng stated that he will share them next year and is currently preparing for them. However, he revealed that in terms of channels, a considerable portion will be sold separately from Xiaopeng's existing channels.
In terms of Xiaopeng Automobile's main focus on intelligence, He Xiaopeng introduced that in 2024, it will also integrate the ability of multi system and full stack self-development, integrating electronic and electrical architecture, intelligent driving system domain, intelligent assisted driving system, intelligent cockpit, etc., which can quickly deploy to multiple vehicle models and globalization, as well as achieve the integration of whole vehicles across platforms and other transportation tools, To enhance engineering capabilities for global deployment and multi product line deployment.
After reaching cooperation with Volkswagen, Xiaopeng Automobile's overseas strategy has also received external attention.
He Xiaopeng mentioned, "At the end of September, I visited the Wolfsburg headquarters of Volkswagen Group. We had in-depth discussions with Mr. Blume and senior management of Volkswagen on the next step of comprehensive strategic cooperation projects, and the blueprint for long-term strategic cooperation in technology was clearer. We also actively explored more in-depth strategic cooperation opportunities in the international market
In addition, 2024 is also a year for Xiaopeng Motors to reduce costs. He Xiaopeng stated that the strategic cooperation with Volkswagen in the supply chain is advancing, and it is expected that the supply chain cost reduction will produce significant results next year. He is confident in accelerating the achievement or even surpassing the target of 25% cost reduction by the end of 2024, resulting in a significant increase in gross profit margin next year.
He Xiaopeng: Under the leadership of Wang Fengying, the sales channel has undergone a transformation
Since the second half of this year, under the leadership of CEO Wang Fengying, Xiaopeng Motors has begun to accelerate the transformation of its business model in its channels.
He Xiaopeng gave high praise to Wang Fengying. He said, "Our sales channels are undergoing a revolutionary transformation under the leadership of President Wang Fengying, becoming more efficient, flexible, and expanding faster
He stated that Wang Fengying had been observing Xiaopeng's sales system and discussing with the company in the first few months of her tenure.
Another significant change after Wang Fengying's arrival was the establishment of a distributor system. He Xiaopeng stated that the direct sales and distribution stores will adopt a standard service and pricing system, and the heads of each region will manage both the direct sales and distribution stores simultaneously.
He introduced that in the first three quarters of this year, Xiaopeng Automobile eliminated nearly a hundred sales stores at the bottom, and launched the "Jupiter Plan" to introduce more powerful dealer partners. Within two months, it completed the investment promotion work for more than 100 new sales stores and reached cooperation with a group of excellent luxury car dealers for the first time.
He Xiaopeng also revealed that the number of car models in 2025 will significantly increase compared to now, forming a combination of "first and second tier+third and fourth tier", and vigorously sinking towards third and fourth tier cities.
In the medium to long term, he said, "We will accelerate the opening of new distribution stores from the fourth quarter, and achieve a sales network size of over 500 stores by the end of this year and early next year. The upgrading and expansion of channels, as well as the diversity of marketing strategies, will become an important driving force for sales growth in 2024 and beyond
Regarding store efficiency (store sales efficiency), He Xiaopeng replied that there is still a lot of room for improvement in Xiaopeng Automobile compared to the industry, and it is expected that store efficiency will be significantly improved in 2024.
On January 30th this year, Wang Fengying, former Vice Chairman of Great Wall Motors, became the President of Xiaopeng Motors, fully responsible for the company's product planning, product matrix, and sales system. At that time, Xiaopeng was undergoing a large-scale organizational restructuring, and in this transformation, Xiaopeng Automobile underwent large-scale changes from management to department heads.
He Xiaopeng mentioned that the results of this organizational adjustment exceeded expectations, and its organizational change is still ongoing. "The next step is to continue to transform around organizational, marketing, and category innovation. I believe that the effects of a series of changes starting this year will be more evident in 2024 and beyond, and enter the fast lane of large-scale and high-speed development by the fourth quarter of next year
On the day of the financial report release, Xiaomi Motors appeared on the website of the Ministry of Industry and Information Technology. An analyst asked about the views of technology companies with ecological advantages such as Xiaomi and Huawei entering the automotive industry. He Xiaopeng politely responded that more and more cross-border companies are entering the automotive market. In terms of cross-border competition, it depends on how much extension this company's business has in the electric vehicle field. For example, traffic can complement each other in many places, but in terms of terminals such as PCs, smartphones, televisions, etc., their traffic cannot be interconnected.
As of the close of the US stock market on the 15th, Xiaopeng Automobile rose 2.29% and fell more than 1.5% after hours. As of press release, the Hong Kong stock of Xiaopeng Automobile has fallen by over 4%.