Redesigning automotive regional teams: local operating authority and shared support

Start with decisions and workload

Automakers seeking lower regional costs should first remove duplicate reporting, conflicting instructions and repeated approvals, while giving regional teams the authority to move resources between stores. Dealer networks need stronger partner economics and inventory management. Agency networks need customer conversion and order fulfilment. Directly operated networks need regional accountability for store managers, workforce productivity and store economics. Each model allocates costs and risks differently.

Regional teams create value by solving problems individual stores cannot resolve: moving vehicles and staff, diagnosing performance, securing headquarters support and developing managers. Teams occupied mainly with consolidating numbers and forwarding instructions have limited capacity to improve operations.

Six principles should guide the redesign. First, accountability must come with decision rights. A direct-sales region responsible for staffing costs should participate in deployment and manager appointments within approved limits. A manufacturer holding agency inventory must own allocation and fulfilment responsibilities. Second, stores should receive routine operating instructions through one coordinated channel; finance, compliance and safety retain independent oversight.

Third, headquarters should share standard materials, reports, systems, procurement and settlement, while regions handle field judgement and cross-store coordination. Fourth, management boundaries should reflect store density, catchments and travel distance. Fifth, evaluation should combine outcomes with controllable operating measures and include costs across headquarters, regions and stores. Sixth, discontinue or consolidate tasks before reducing staffing, so administrative work does not simply move to store managers.

The sequence is to map decisions and work, assign accountable owners and authority, and then determine layers and staffing. The designs below are analytical recommendations; the company examples describe reported practices.

Li Auto: local authority requires headquarters support

Li Auto’s changes between 2023 and 2025 offer a practical direct-sales case. According to 36Kr, it established 26 provincial retail regions in 2023, combined headquarters retail and delivery functions in mid-2024, and consolidated into five major regions in March 2025. Parts of sales, operations and service moved to those regions, with responsibility for sales, profit and net promoter score; headquarters strengthened standards and training.^[1]

LatePost reported in August 2025 that smaller provincial markets would sometimes be combined with neighbours as headquarters took direct responsibility for 23 regions.^[2] The changes highlight the need to design regional boundaries, authority and central support together. Larger regions can pool resources but increase distance from stores. Fewer layers shorten reporting lines but require headquarters to absorb more support work.

Other automakers should translate each redesign into three lists: additional regional decision rights, headquarters service commitments and discontinued tasks. Track resolution time, field-coaching time and total management costs separately from sales, which also respond to products, prices and delivery capacity. Public information does not provide a basis for isolating the financial returns of each Li Auto reorganisation.

Different sales models require different regional priorities

In a dealer network, regional leaders need to understand the investor’s accounts. Reviews should separate new-car contribution after discounts, inventory financing, service and other business contribution, and the conditions and payment timing of rebates. Unconfirmed rebates should be shown separately to expose cash pressure. Support should address purchasing mix, stock transfers, acquisition channels and coaching rather than shifting short-term sales pressure into dealer inventory.

The manufacturer can agree support, corrective actions and verification within its contracts and authority. The dealer remains responsible for its employees and business decisions. Financial diagnosis and commercial negotiation are important qualifications for regional leadership.

Agency operations need dedicated order capabilities. BMW’s 2023 MINI announcement described retail partners providing advice and customer care, receiving fixed commission per vehicle, with nationwide pricing and connected digital sales processes.^[3] This describes the announced scheme, not confirmation that all markets subsequently met its original expansion timetable.

Contribution and payment rules must cover customers who enquire online, test-drive at one location and take delivery at another. Teams need clear ownership of configuration changes, delays and cancellations. Additional service requirements should be assessed against agents’ workload and economics. A regional exception owner prevents store advisers from chasing multiple headquarters departments. Actual contracts and risk allocation determine responsibilities.

Direct operation requires regional access to controllable economics and authority. China Securities Journal’s 2025 interview on NIO’s basic operating units described return-on-investment scrutiny extending to salespeople, stores, regional companies and development projects.^[4] A recommended split is for headquarters to retain brand, national pricing and major capital decisions, while regions deploy local resources and participate in store-manager appointments. A separate city management layer should require sustained coordination work across stores.

Every store visit should resolve a specific problem

Seven-Eleven Japan states that an operating field counsellor typically covers seven or eight stores, with around ten counsellors and a district manager forming a district.^[5] Its published working schedule includes reviewing sales before visiting, inspecting the store, reviewing previous actions with the owner and agreeing follow-up measures.^[6] Automotive retailers should adapt the work itself and calculate coverage for their own distances and transaction patterns.

High showroom traffic with low test-drive participation calls for checks on weekend vehicle availability, booking conflicts and advisers occupied with deliveries. More advertising can worsen queues when demonstration capacity is the constraint. Strong test-drive activity but weak orders requires investigation of trade-in offers, financing, specifications and competitor losses by model. Regional interventions should reflect these differences.

Problem stores warrant more intensive coaching; stable stores need periodic checks; mature stores should face fewer repetitive meetings. Each visit should test previous actions rather than collect the same operating overview again.

Calculate staffing from work and share the data

Consider an illustrative cluster of 24 stores. Six problem stores receive two monthly visits, twelve stable stores receive one, and six mature stores receive one every two months: 27 visits per month. At six hours per visit including travel, preparation and follow-up, the requirement is 162 hours. If each operations manager can allocate 90 hours, the calculation is 1.8 people: start with two and validate travel and workload. These are planning assumptions, not industry benchmarks.

If meetings and reporting leave only 45 field hours per manager, the same task requires roughly four people. Staffing design must therefore examine time allocation. Analytics, training, marketing execution and network planning can be shared; dedicated regional posts require sustained demand.

Fast Retailing’s October 2024 presentation described its management platform, introduced in 2023, bringing together store and online SKU sales, inventory, productivity per person per hour, profit and loss, and plans. Managers are expected to identify exceptions and act on the same information.^[7] Automotive regional dashboards can organise measures into customer conversion, order quality, vehicles, people and economics. Systems should generate routine figures; stores add explanations and actions.

Conversion should follow the outcomes of the same customer cohort over time. Dividing this week’s orders by this week’s new leads mixes buying cycles. Economics should separately show controllable contribution and allocated headquarters costs to clarify the effect of regional decisions.

Use a 90-day pilot before expansion

Select two reasonably comparable regions by product mix, store maturity and demand, retaining a pre-change baseline. In the first fortnight, remove duplicate meetings, reports and approvals. In weeks three and four, establish one operating-task channel and delegate staffing, budget and vehicle decisions. In month two, execute store improvement plans and record working time. In month three, compare total costs, store contribution, conversion and complaints, documenting product launches, pricing changes and demand shifts.

The priority is to remove duplicate work, close gaps in authority, and then staff the required field workload. Dealer regions need economic diagnosis; agency regions need order and commission coordination; direct regions need store-manager and workforce management. Expansion should depend on lower total costs, faster problem resolution and stronger store operations. Regional payroll savings alone do not establish an operating return.