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Polestar to expand its presence in China with new showroom network

Polestar to expand its presence in China with new showroom network
Polestar to expand its presence in China with new showroom network

China’s premium electric vehicle firm, Polestar has recently revealed plans to expand its showroom network in the mainland as it prepares itself to compete against Tesla Inc.’s Model 3 variant. Reportedly, showroom strength is turning out to be a significant differentiator for electric vehicle (EV) manufacturers in the world’s largest EV and automotive market, especially at a time when companies are planning to roll out new line ups of their models.

Polestar is planning to launch its Polestar 2 electric sedans in China in July and presently has only one showroom in the country’s capital Beijing. However, it intends to change this scenario by building 20 new showrooms, with most of them becoming fully operating by the third quarter of 2020.

Sources cite that Polestar is looking to take a new approach over traditional vehicle sales which heavily rely on dealers. In its new approach, Polestar would directly sell its car to customers, a strategy that is lately being pursued by prominent EV makers like Tesla, Xpeng Motors, and Nio Inc.

Direct customer sales allows automakers to effectively manage their vehicle’s retail price as well as its inventory and production cost. But it acts like a double-edged sword as it could add costs if the automaker is required to purchase new showrooms.

Evidently, Polestar is planning to partner with investors to operate and build showrooms while handling the delivery and sales of cars. Polestar’s representative refrained from commenting on this move.

As per its plan, the Chinese automaker is focusing on initially opening showrooms in Shanghai and later expanding them into northern Tianjin, southern Guangzhou, and coastal Ningbo. It is said that most of these showrooms would be in shopping malls.

For the record, Tesla has more than 50 showrooms in China, whereas Nio currently operates around 110 showrooms. As for Xpeng, it plans to have over 200 outlets in the country by the end of 2020.

Source Credit: https://in.reuters.com/article/geely-polestar-electric/geelys-polestar-plans-china-showroom-expansion-to-compete-with-tesla-sources-say-idINKBN2390A3

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