Two sources with knowledge of the situation claimed that Tesla (NASDAQ:TSLA) has closed what had been its flagship showroom in China as the firm modifies its sales and service strategy in its second-largest market.
Late last week, Tesla closed its showroom at Beijing’s Parkview Green, a premium downtown retail mall, according to the people, who requested anonymity because they were not authorised to speak publicly about the shutdown.
Related: Analysts warn of a “price war” as Tesla cuts prices in China by up to 9%.
On Wednesday, a call to the business was transferred to a nearby Tesla showroom. A request for comment from Tesla did not receive a prompt response.
Tesla’s first shop in China debuted in Beijing in 2013. In 2018, it underwent renovations and expanded to take up two floors of the mall.
Over 200 locations that exhibit models and set up test drives for prospective customers are owned and operated by Tesla across the nation.
After traffic fell off during COVID restrictions, Reuters reported in September that Tesla was considering closing several dealerships in glitzy malls in places like Beijing.
As the business seeks to achieve Chief Executive Elon Musk’s goal of enhancing customer service, it also intends to place more emphasis on outlets in less expensive suburban locations that can also perform repairs.
As such, Tesla has been filling service positions in China with technicians and other workers as part of that endeavour. As of Wednesday, there were still 305 service job positions listed on the company’s Chinese recruitment website.
More than half of Tesla’s outlets in China don’t provide repair or maintenance services and are situated in small, expensive spaces. This included the Parkview Green Tesla shop, which is now closed.
Instead of depending on dealers, Tesla owns every single store. It also offers online car sales. Because of this, it has had more freedom to modify a retail strategy that was initially based on Apple’s (NASDAQ:AAPL) glitzy stores in prime locations.
Related: The recession, according to Tesla’s Musk, may endure until 2024.
In China, the world’s largest auto market, Tesla has reduced the starting prices for its Model 3 and Model Y vehicles by as much as 9%, reversing a trend of price increases across the sector.
According to the China Passenger Car Association, Tesla sold 318,151 vehicles in China in the first nine months of 2022, up 55% from the same period in 2017. In contrast, sales of hybrid and electric cars worldwide climbed by 113.2%.