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In the face of the fact that the entire car market failed to achieve a better-than-expected recovery in March, there is no doubt that Xilai Motor has returned to the state it was at the beginning of the year. Compared with the normal month-on-month sales growth of most car companies in February, Xilai recorded a month-on-month increase of 116.8% in March, which is undoubtedly better than most car companies.

According to the latest delivery data released by Lulai yesterday, the overall delivery volume of the NIO brand in March 2020 was 1533, an increase of 11.7 per cent over the same period last year and 116.8 per cent over the previous month, with a total delivery of 1479 ES6 models and 54 ES8 models.

As the ES6 has always been its most popular model, under control of the epidemic, ES6 has gradually returned to its pre-epidemic normal, with overall sales better than the 1493 delivered in January, down from 2537 in December. The company plans to start delivering a new ES8 in April 2020, so it will also curb deliveries of the old ES8.

"the month-on-month increase in sales in March was also due to a gradual pick-up in visits to offline stores while we continued to sell online during the epidemic, and the backlog of orders since February was released in March," said Li Bin, CEO of Xilai. In addition, Li Bin also predicted that average daily new orders would return to last year's peak in April.

In terms of cumulative sales in the first quarter of 2020, a total of 3838 new cars were delivered, exceeding its target of 3,400 to 3,600 units in its 2019Q4 earnings guidance. Since delivery began in June 2018, the brand has delivered a total of 35751 units, including 20675 ES8 and 15076 ES6.

Although Xilai achieved better-than-expected sales growth in the first quarter, the more it sells, the more the company will lose money. According to the sales data of Xilai Automobile in 2019, a total of 20565 vehicles were delivered in the whole year, an increase of 81.2% over the same period last year, and it has also become the only new power brand in China with an annual delivery volume of more than 20, 000 units. However, due to the decline in gross profit margin, Xilai is basically in the situation of "losing one at a time". As a result, the annual net profit and loss in 2019 reached 11.3 billion yuan, compared with the reported net loss of 9.6 billion in 2018, an increase of 17.2% over the same period last year.

According to the data, the gross profit margin of Lulai Motor for the whole year of 2019 was-15.3%, down more than 10.1% from 5.2% in 2018. Qu Yu, vice president of finance at Lailai, explained that due to the price difference between ES6 and ES8 in the fourth quarter, the overall average price of bicycles has a downward trend. In addition to the manufacturing costs of raw materials and amortization, the quality insurance service provided by Xilai to car owners in the past year has also greatly increased the consumption of labor costs and further lowered the gross profit margin of vehicle sales.

To this end, at the results call meeting in the fourth quarter of this year, Li Bin also said that he was confident of achieving the 2020 sales target, and that the gross profit margin of Xilai in the second quarter would become a regular one and a double-digit gross profit margin would be achieved by the end of the year. In addition, Li Bin also revealed that in 2020, Ulai will improve the optimization of the supply chain, continuously reduce the cost of battery packages, and reduce the average manufacturing costs of vehicles brought about by the increase in production scale and management optimization, so as to achieve a reduction in gross profit margin.

In addition, the personnel aspects of NIO are also constantly changing. First, Zhu Jiang, vice president of user development at Xilai, revealed that he would step down at the end of May and become a consultant. Wang Wenxuan, regional general manager of NIO Hangzhou, would take over. At the end of March, Zhao Yuhui, former vice president of Ulai Automobile customer Center, left to join Great Wall Motor as the general manager of the user center of Great Wall sales company. In early April, Huang Chendong, senior vice president in charge of the electric power engineering team, will leave office until June 30.

Although, as the head of the new power in China, car companies have achieved continuous increase in sales, but as the most important thing for car companies is to make profits, there is no doubt that car companies will not last long if they only do business at a loss. In the face of losses, financing has become the main mode of survival of Ulai. Although there has been a lot of financing news since 2020, facing huge losses, the current financing can only guarantee the operation of NIO in the short term, so the future of NIO is still very embarrassing.

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