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A high-end brand is rumored to lay off 15% of its staff worldwide.

2024-07-14 Update From: AutoBeta NAV: AutoBeta > News >


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Today, according to several media reports, Star Motor plans to lay off about 450 people worldwide, accounting for 15% of its total workforce. The main purpose of the layoffs is to accelerate profit margin improvement and reduce the company's total capital needs, so as to break even cash flow by 2025.

In fact, Polaris said in May last year that it would pay more attention to cost management and would cut 10% of its jobs worldwide, when it froze the company's recruitment efforts. On the global layoffs at the time, JohanMalmqvist, the star's chief financial officer, said: the layoffs are based on the current macroeconomic environment and the company is seeking to control costs. At that time, Star Motors also lowered its sales target for last year to 60, 000-70, 000 vehicles from 80, 000. Officials say the reduction in sales targets is mainly due to the failure to deliver the new model Star 3 on time in the summer of 2023, which needs to be delayed to the first quarter of 2024.

For the brand of Polar Star, perhaps many people are relatively strange. Polar Star is a high-end electric car brand jointly launched by Geely and Volvo. It was originally a car retrofit manufacturer and became a supplier of performance models to Volvo in 2005. In 2009, Volvo included Polar Star in its racing and performance car research and development department. In 2015, Volvo acquired Polar Star wholly and became Volvo's electrified high-performance R & D department. In October 2017, Volvo and Geely jointly announced the formation of a joint venture brand, Polestar. In June 2022, Polar Star sounded the opening bell on the NASDAQ Stock Exchange in the United States and was officially listed.

It is worth noting that although the back to Geely and Volvo two giants, but the performance of polar stars in the market is not remarkable. As an independent electric high-performance car brand, Ji Xing said from the very beginning that it would bid against Tesla. At that time, Polar launched the first model Polestar 1 positioning two-door sports car, the price is as high as 1.45 million yuan, such a high price naturally means that sales are not easy to break through. Relevant data show that only 24 Polestar 1 vehicles were sold in 2020. At that time, many people in the industry pointed out that maybe the official launch of Polar 1 was not for sales, but for gu to create a high-end brand image for bi.

On February 27th, Polar 2 launched its first pure electric car, the Polar 2, which is based on the Volvo CMA architecture and sells for between 258000 yuan and 338000 yuan for the Standard Tesla Model 3. The price is several times lower than that of the Polestar 1, and it is also regarded as a high-volume car. However, Star 2 has not been favored by the market. According to the data, the cumulative global sales of Star cars in 2021 are 29000.

Last year, officials released a picture of the future product line, showing models of Polar 2, 3, 4 and 5. According to the plan, Polar will launch three new cars in the next two years. Among them, Polar 3 was launched in October last year, and the new car is positioned as a pure electric SUV model, with a total of two versions, with a pre-price range of 88-1.03 million yuan in China. Among them, the long-lasting version of the dual-motor is priced at 880000 yuan, and the high-performance version of the dual-motor is priced at 1.03 million yuan. Star 4 opened at the 2023 Guangzhou Auto Show. Star 5 will be launched in 2024.

For the official announcement of the future product line of Polar Star, Nathan Foshaw, former president of Polestar Polar China and Asia Pacific, once said that these three products are well suited to the needs of the Chinese market, such as Polestar 3max 4 are all SUV models, taking into account the preferences of Chinese consumers, but it is worth noting that the domestic new energy market has become more and more fierce, even if Polar Star speeds up the product layout. However, it is still difficult to increase domestic sales quickly. Data show that only 2048 cars were sold in China in 2021, accounting for 7 per cent of global sales, while sales in China fell from 1717 in 2022 to 1100 in 2023, down 34 per cent from the same period last year.

As for the performance of the star in the Chinese market, Feng Dan, president of the star China region, said during the Shanghai auto show this year: in the Chinese market, the star has taken some detours before, so it is necessary for the star to be a brand before sales. From the whole brand level, I still don't know about this market before. All the marketing methods, the mode of operation of the brand, from the headquarters, there is no change. Although polar stars have their own advantages, they are not seen by consumers. In the future, Polar Star will carry out research and development and preparation at the pace of a new car every year to accelerate the layout of the Chinese market.

Although officials say they will accelerate the layout of the Chinese market, the layoffs may also reflect that Polar Star is controlling costs. According to the data, Polar had revenue of $1.844 billion in the first three quarters of 2023, an operating loss of $735 million in the first three quarters and a gross profit of $3.6 million in the third quarter, down 11% from $4.1 million in the same period last year. Officials have said it plans to achieve double-digit gross margins and annual sales of about 155000 to 165000 vehicles in fiscal year 2025 by reducing the cost structure, refocusing on key markets and a rich product portfolio.

As for the performance of Polaris in China, some industry insiders pointed out that due to the positioning of its products in a niche market, the price is set in a direct price zone of 20 to 1.5 million, which is on the high side compared with most of the new car-building forces in China. In addition, Polar Star's less investment in the domestic market marketing, resulting in low popularity, the delivery time of official models is long, a variety of factors affect product sales are naturally not high. At present, the traditional car companies are speeding up the electric layout, and a new round of knockout has begun. How to maintain the strength and survive in the new round of competition, increasing revenue and reducing expenditure has also become a matter that car companies need to face.

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