By Martin Mou
Chinese electric-vehicle startup XPeng Inc. is poised to expand its sales network by partnering with Zhongsheng Group Holdings Ltd., a major car dealer in the country.
The two companies have signed a memorandum of understanding, under which Zhongsheng is expected to invest in and operate XPeng-branded dealership outlets in China, the car dealer said Friday.
Zhongsheng, which runs stores and service centers for brands including Mercedes-Benz and BMW, said it plans to open XPeng outlets initially in select first-tier Chinese cities or cities where demand for EVs is high.
The partnership, should it proceed, could mark a new sales channel for EV makers, which tend to run their own sales and service outlets. For car dealers, joining hands with EV makers could help them secure a fast-growing segment of the Chinese auto market.
Zhongsheng said that establishing a long-term partnership with XPeng allows it to tap into China's EV market and increase its dealership market share. China Yonda, a competitor to Zhongsheng, is also courting EV makers to form such partnerships.
XPeng is a major Chinese EV startup, alongside U.S.-listed peers Li Auto Inc. and Nio Inc. Considered by some analysts as the most tech-centric of China's EV players, XPeng sold 13,340 vehicles in the first quarter of 2021 and recently launched its third production vehicle, the P5 sedan.
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(END) Dow Jones Newswires