AutoBeta(AutoBeta.net)11/03 Report--

On November 3rd, Li Bin, chairman and CEO of Xilai Automobile, issued a full letter to the employees of Xilai, confirming that it would cut about 10 per cent of its jobs, and that the specific adjustment would be completed in November. Li Bin said in the letter that the company will ensure long-term investment in core key technologies, maintain the leading edge of technology and products, ensure that sales and service capabilities can cope with fierce market competition, and ensure the timely listing of nine core products from three brands. On this basis, merge repeated construction departments and posts, change inefficient internal work flow and division of labor, abolish inefficient posts; improve resource efficiency, postpone and reduce project investment that can not improve the company's financial performance within three years.

Yesterday, a netizen revealed on a professional software platform that the layoffs will start in the range of 10%, 20%, and then the post was confirmed by netizens certified as employees of Lulai, so it quickly received attention from the outside world. After the fermentation of public opinion, Qin Lihong, co-founder and president of NIO, responded that NIO has been pursuing the improvement of organizational efficiency, and many online rumors are untrue.

Qin Lihong did not directly deny the truth of the rumors, but said that "the pursuit of organizational efficiency", "rumors are often untrue", which precisely proves the authenticity of layoffs. According to relevant data, by the end of 2022, there were 26763 employees in Lai, accounting for the highest proportion of the three car companies. Based on 10 per cent layoffs, the layoffs are expected to reach at least 2600, which is not low.

It is worth mentioning that in the internal letter released by Li Bin on January 1, he called for improving the efficiency of employees and optimizing inefficient projects and teams. In April, Xilai made small layoffs after handing out year-end bonuses, with nearly 300 employees actively and passively leaving its digital platform (digital development).

According to the financial report, the R & D expenditure in the second quarter was 3.345 billion yuan, an increase of 55.6% over the same period last year and 8.7% month-on-month, mainly due to the increase in R & D personnel costs and equity incentive fees, as well as the increased design and development costs of new products and new models. Sales, general and administrative expenses were 2.857 billion yuan, an increase of 25.2% over the same period last year and 16.8% month-on-month, mainly due to the increase in the cost of sales staff, the increase in sales and marketing activities, and the increase in expenses related to the expansion of the company's sales and service network. The above two big data are higher than Xiaopeng car and ideal car.

Falling deliveries and high expenses have directly pushed down NIO's gross profit margin. According to the financial report, the gross profit margin of Lulai was 1.0% in the second quarter, compared with 13.0% in the same period in 2022 and 1.5% in the first quarter of 2023. Li Bin said on the conference call that the current market environment is full of challenges, and the competition in the intelligent electric vehicle market is becoming increasingly fierce. Ulai is ready in terms of core technology, product layout, sales capability, manufacturing and supply chain, etc., focusing on the implementation of marketing and sales strategies to promote a steady increase in delivery volume.

In 2023, the performance of Xilai Automobile is not ideal. According to the financial report, the delivery volume of Ulai in the second quarter was 23520, down 6.1% from the same period last year and 24.2% from the previous month, barely fulfilling the previous delivery forecast of 23000-25000 vehicles. This is also the lowest sales in the past two years, mainly due to the control error of intergenerational switching of NIO products, which led to the trough of sales, and this is not the first time that sales have fallen as a result of product iteration. To this end, Li Bin said at the results communication meeting that he would focus on improving sales capacity, mainly because it was found in previous operations that it was unable to meet the demand for selling seven to eight cars at the same time.

Judging from the latest delivery situation, NIO delivered 16100 new cars in October this year, a slight increase of 2.8% over the previous month, ideal has exceeded 40, 000 in the same period, Xiaopeng also exceeded 20, 000 for the first time. On the whole, the delivery volume of Xilai seems to have begun to grow steadily, but the growth rate is far less than that of other new brands. In order to qualify for the finals in the context of increased market competition, it is necessary to further improve the efficiency of execution and ensure that key businesses are fully resourced. This is also the view that Li Bin wants to express.

At present, in the new forces, except for the ideal car, other enterprises are in a state of loss. Xiaopeng Motor has received reverse blood transfusion from Volkswagen Group, and the ideal car has achieved self-hematopoiesis, while behind the polar krypton and Lantu is the support of traditional manufacturers. In contrast, NIO should also consider when to turn losses into profits, need to increase revenue and cut expenditure, and focus energy and funds on increasing sales, rather than continuing to make big efforts. Previously, NIO Phone was released to build an ecology and improve the experience of its users, but how many users are willing to pay after a huge investment in the mobile phone business?

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