Chongqing - Pop-up stores are revolutionizing new energy vehicle (NEV) retail in Chongqing's business districts, with Savills' 2023 data revealing 73 new leases alongside 74 closures, indicating a fast-changing retail environment.
Traditional 4S store zones
Chongqing's Aoti car market's traditional 4S stores are adapting to the surge in NEVs and evolving consumer trends. Geely Galaxy's Xindianma Aoti store in Chongqing's Aoti car market, featuring models like the E8, L7, and L6, exemplifies the leasing trend among new NEV brands, with others like Changan Qiyuan and BYD also entering the area.
Besides, Chongqing's Yuzhong District on Jingwei Road once had seven 4S stores spanning tens of thousands of square meters. Recently, one of these stores welcomed a new addition: XPENG Motors.
The XPENG sales and service center in Yuzhong District, Chongqing. (Photo/ Yan Wei)
"Last month, we moved to our largest sales and service center in Chongqing," shared an XPENG Motors staff member. The center combines display, sales, delivery, and after-sales services.
Li Auto opened its largest center store in the city as well. This store stands alongside Changan Qiyuan and Geely Galaxy, easily identifiable from a distance by their striking, large signboards.
Meanwhile, Tesla's largest integrated center in Southwest China, located in Yubei District, combines various services, underscoring the importance of such multifunctional spaces.
Rising pop-up store models in shopping districts
A new trend is emerging in core business districts, with many stores either being transferred to new owners or downsizing. In locations like Longfor Times Paradise Walk and Guanyinqiao Business District, brands such as AVATR, Voyah, and Tesla are opting for smaller, more efficient spaces. Notably, Tesla's pop-up store model in Guanyinqiao has gained popularity, reflecting a move towards temporary, yet impactful retail spaces.
ZEEKR's pop-up store in Longfor Times Paradise Walk. (Photo/ Yan Wei)
Chen Xueqin, executive vice president of the Chongqing Automobile Business Association, observed that the NEV direct-sale stores in Chongqing surged to 112 by last June, a significant rise from 2018. He highlighted that these brands are returning to traditional auto sales zones, mainly using pop-up stores in shopping districts.
The sustainability of high-cost store expansion is under scrutiny. Several brands are transitioning to pop-up stores or traditional auto sales areas due to high rents and marketing costs in prime locations. Jiaze Sun, Tesla's regional general manager, emphasizes the need for a quick and effective business district presence, with pop-up stores serving as a strategic solution.
Similarly, XPENG's approach involves short-term stays in various districts, reducing rental costs and increasing brand visibility. According to Chen, this strategy is more about brand advertising than traditional retailing.
Integrated service models
The automotive industry is seeing a resurgence of traditional sales models. Fisker, an American EV company, is moving away from direct sales in the U.S. due to high costs and inefficiencies, aiming to partner with around 50 dealers by 2024. Similarly, in Chongqing, Seres AITO Authorized User Center has collaborated with a dealership, offering a comprehensive 3,800 square meter facility for sales, customer care, delivery, and after-sales services.
Industry experts suggest that Seres is recognizing the benefits of partnering with dealerships. With over two decades of growth, auto dealers boast an extensive network of outlets, robust sales channels, and experienced teams - assets not typically possessed by NEV manufacturers.
This trend suggests a need for diversification in marketing channels. As Chen proposes, the era of NEVs doesn't spell the end for 4S stores but necessitates a collaborative and adaptive approach. Both 4S stores and NEV manufacturers should explore integrated service models that are more attuned to current consumer preferences. This evolution is crucial for finding new relevance in an increasingly competitive and changing market.