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Tesla’s plans, and after-sales network expansion in China, the Shanghai plant is in operation

SHANGHAI (Reuters) – Tesla Inc. (TSLA.(O) plans for a doubling of the number of repairs and maintenance, stores, and add about 100 charging stations, and the renovation of the showrooms in China, the electric-car maker gears up to open its Shanghai plant.

Workers carry construction materials for a new Tesla showroom is in Guangzhou city, Guangdong province, China (October 25, 2019 at the latest. REUTERS/Yilei Sun,

The moves mark a clear departure from the approach of the chief executive, Elon Musk, announced in March, when he said that the company is going to close a lot of stores around the world to cut costs.

Tesla had already been dealt with in China, the world’s largest market for electric cars, other than it is elsewhere. The company and Musk is openly in contempt for marketing, but also in China, Tesla offered a race-themed events and sales parties.

“The building of the cars from the Shanghai plant, it is only the first step,” Tesla’s vice president of Tao Lin said at a conference last month in Beijing. “Then, we are committed to the delivery of the car and it’s very good for our customers and provide good after-sales service.

Tesla plans to be a part of its showrooms in China in a one-stop-shops, called the “Model Centers” that also serve as delivery sites, and providing maintenance support to two sources familiar with the matter said.

The sources, who spoke on condition of anonymity because they were not authorized to speak to the media, said the roll out would start in Shanghai and Guangzhou.

In the next few months, the company plans to double its service centers and 63, 29 and the increase of fast-charging stations by 39%, to 362, according to the Rate schedule of documents seen by Reuters.

“The expansion of the service network is very important in order to foster the trust and confidence of its customers,” Tesla China’s general manager Wang Hao told Reuters, adding that the company would have to build more charging stations in China for the next year at a faster pace.”

“There is a growing potential for sales of that other cities in the country, and the need to prepare for the growing repair and maintenance demand in order to avoid complaints,” said one of the sources said.

Tesla, which is the most of the service centers in China’s coastal regions and large provincial capital cities, will be the opening of a new market in the northwestern city of Urumqi, in the south-western city of Kunming, and “Ice City,” Harbin is in the north, and the documents turned out to be.

The sources warned that the plans could change, depending on the circumstances.

Its headquarters are in the United States of america did not respond to a Reuters request for comment.

In her efforts to create a physical presence in China, comes as the car maker has started the process for the production of the $2 billion, the Shanghai plant is the first overseas factory, with a head-start of mass production at the end of December.

Tesla has said that it will be in a position to build a 3000 Model in a 3 way to a week in the early stages. That’s almost four times the amount of the imported Model, the 3 vehicles were sold in China, by month, of this year, according to figures from research firm LMC Automotive.

THE RISING COSTS OF

The scheme is likely to be pressure on the Rate, which is the burning of money because of heavy losses, and capital expenditures.

Tesla has negative free cash flow every quarter to five in the past decade, however, positive free cash flow of $ 371 million in the three months that ended in September, but due to the record supplies and lower costs.

It was not immediately clear how much of Tesla’s would have to be given to the expansion of its sales and after-sales service network in China.

Tesla is approximately 48 electronics in the mainland of China. In contrast, BMW – (BMWG.DE), Europe (DAIGn.DE), Mercedes-Benz, and Audi (NSUG.DE), which is an electric sport-utility vehicle models in China by the end of this year, more than 500 sales outlets there.

Even though Tesla might not need to have as many electronics as its rivals, it has to be more than it is at the moment, experts said.

“Chinese consumers are prepared to examine the car in to a brick and mortar shop, so the car manufacturers need to have a store network in different locations,” said Cui Dongshu, secretary-general of the China passenger car Association.

The maintenance of growth in China is even more crucial for Tesla, as sales in the united states has tumbled to 39 percent in the third quarter, the first decline in more than two years of age. On the other hand, sales in China increased by 64% to $669 million.

A Tesla sign, is on display at the second China International Import Expo (CIIE), in Shanghai, China, 5 November 2019 at the latest. REUTERS/Aly Song

Tesla is also expanding its sales and delivery workforce in China, It has a variety of hiring events in Shanghai, Beijing and Shenzhen, for the sale and supply of staff in the past six months, according to the job advertisements posted on social media sites.

A Tesla service center, in Beijing, customers are said to need more maintenance and charging facilities would encourage them to continue.

“It’s definitely a good thing. If it’s useful enough, I will drive my car to other cities,” said Niu Siliang, a 60-year-old retiree who is the owner of the Model X SUV.

Reporting Yilei Sun, and Brenda Goh in Shanghai, additional reporting by Beijing newsroom; Editing by Miyoung Kim and Gerry Doyle

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