"We don't have plans for four-wheel electric vehicles, and in the future, we will focus on short transportation and short travel," said Li Yan, CEO of Xiaoniu Electric, in an interview with the Daily Economic News.
Recently, Xiaoniu Electric released three new cars, including electric motorcycles, electric bicycles, and off-road electric motorcycles. Among them, the highest configuration electric motorcycle NX is priced at 30000 yuan, and the electric bicycle NXT, which focuses on the domestic market, is also around 10000 yuan. "We always believe that the direction of firmly focusing on the high-end market of the two wheeled electric vehicle is right." Li Yan said that it may have a certain impact on the company's sales in the short term, but in the long run, the company is confident in the development of the high-end market of the two wheeled electric vehicle.
Xiaoniu Electric CFO Zhou Wenjuan told reporters that with the further expansion of channel layout and the rapid launch of new models, the overall sales of Xiaoniu Electric will show a rapid upward trend in 2024, and the annual performance is expected to achieve slight growth or remain unchanged.
It is worth mentioning that at the beginning of 2023, Xiaoniu Electric gave an expected annual sales of between 1 million and 1.2 million vehicles. The latest data shows that the cumulative sales of Xiaoniu Electric in 2023 were only 709800 units, a year-on-year decrease of about 14.65%. Among them, the cumulative sales in the Chinese market were about 601000 vehicles, a year-on-year decrease of about 15.42%; The total sales in the international market were 108800 vehicles, a year-on-year decrease of approximately 10.12%.
Xiaoniu Electric Financial Report
Regarding the reason for the decline in sales, Li Yan explained that the cost of batteries accounts for about 40% of a two wheeled electric vehicle, so the price increase of lithium batteries will bring great pressure to the two wheeled electric vehicle.
However, the leading two wheeled electric vehicle companies, Yadi, Aima, and Tailing, which focus on the mid to low-end market, have achieved impressive results in 2023. Public data shows that in 2023, Yadi sold a total of 14 million new cars, Emma sold 11 million new cars, and Tailing sold 8 million new cars.
The significant decline in sales also led to a significant loss for Xiaoniu Electric in the third quarter of 2023. According to the third quarter financial report released by Xiaoniu Electric in 2023, Xiaoniu Electric's revenue in the third quarter was about 927 million yuan, a year-on-year decrease of 19.6%, and a quarterly net loss of 79.4 million yuan, a year-on-year profit to loss.
"In the Chinese market, in the third quarter of 2023, due to sluggish consumption in first tier cities, product sales slowed down. In overseas markets, such as Germany and the Netherlands, there was also a decline in performance. At the same time, in the European market, Xiaoniu Electric still faces operational pressure from distributors." Li Yan explained.
On March 8th, a staff member related to Xiaoniu Electric explained in an interview with reporters that in the past two years, the large-scale agent dealers of Xiaoniu Electric in the European market have experienced a downturn in their sales channels in countries such as Germany, France, and Italy due to financial crises, and some dealers have no cars to sell. This also leads to the inability of Xiaoniu Electric to increase sales in the European region.
To reduce overseas sales risks, Xiaoniu Electric has begun to change its original distribution model. "Previously, Xiaoniu Electric's sales in overseas markets were equivalent to being a 'hands off shopkeeper', which required companies to take on significant risks." Zhou Wenjuan told reporters that starting from 2024, Xiaoniu Electric's channel layout in overseas markets will adopt a hybrid marketing model. On the one hand, it will continue to be sold to agents, and on the other hand, it will establish its own overseas entity company. ". "In terms of expansion, we directly supply to the stores, which not only shares their business risks but also our risks," said Li Yan.
In terms of domestic market channels, the number of dealers and stores of Xiaoniu Electric is decreasing. Public data shows that as of the third quarter of 2023, the number of franchise stores for Xiaoniu Electric was 2834, compared to approximately 3100 at the end of 2022, a decrease of 266. "Although the number of stores is indeed decreasing digitally, more than 30% of consumption is now completed through online ordering and offline self pickup, which is equivalent to improving the coverage area and efficiency of existing stores offline," said Li Yan.
However, in terms of channel layout, Xiaoniu Electric still has a plan to add 1000-2000 offline stores by 2024. "In 2024, Xiaoniu Electric will make greater concessions to dealers to promote sales growth," said Zhou Wenjuan.
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