The decline in the main business, the failure of the car to provoke the girders, a number of investments continue, and the economic environment has deteriorated. Under the pressure of these four “big mountains”, the Jianghuai Automobile has delivered an embarrassing “final examination paper”.

On February 27, JAC Motor released the 2008 annual report. The report shows that in 2008, the company’s total profit decreased by 94.58% year-on-year, and its key operating profit fell by 98.74% year-on-year to only 4,860,800 yuan.

Embarrassing 2008

Despite the expected decline, such a huge drop is surprising. In the face of the automotive industry's downturn, Jianghuai Automobile's performance in 2008 was not satisfactory. The operating profit rate of its main business decreased by 2.67 percentage points from the previous year. Industry analysts predict that if sales of Jianghuai's MPV products continue to maintain 2008 levels in 2009, then JAC may not be able to achieve satisfactory results in 2009.

In 2008, the sales volume of the three main products of Jianghuai Automobile's Ruifeng Commercial Vehicles, light trucks and passenger car chassis fell as a whole, and the sales volume of passenger car plates was only 11,600, which was unable to play a role in the overall business.

The investment expenditure of a large number of projects is one of the main reasons for the sharp drop in the profits of Jianghuai Automobile in 2008. As of the end of 2008, JAC had a total of 18 unfunded non-raised funds, and the total amount of 20 non-raised funds reached 6.325 billion yuan.

In addition, the overall decline in the commercial vehicle market has caused tremendous impact on the main business of JAC. This part of the impact is expected to be difficult to eliminate in 2009, and analysts believe that this year will be a tough year for JAC.

In response to the macroeconomic downturn, the shrinking of auto consumption, the decline in product profitability, and the decline in corporate profits, Jianghuai Automotive puts the management revolution and cost reduction measures at the top of the list. In addition, JAC Motors expects the scale benefits of the passenger car segment to be formed as soon as possible to help the company tide over the difficulties.

Tougher

"Cost, quality and efficiency, Zuo Zong (refers to Zuo Yan'an) gave us a dead order." A person from Jianghuai Automobile said.

In the new annual business plan of JAC, the emphasis on structural adjustment and implementation of tightening financial policies is to expand sales of small-displacement passenger cars and accelerate research and development and new product listing. Given that it is difficult to recover commercial vehicle business in the short-term, it is an important step for Jianghuai Automobile to reverse the current situation as soon as possible to realize the scale benefits of passenger vehicles.

However, the financial difficulties and the wilting status of JAC passenger vehicles are still the challenges for JAC to rejuvenate.

JAC's high hopes for the passenger car segment have not yet been "weaned," and the dealers' operating conditions are very poor, making it difficult to promote the promotion of the brand. According to statistics from the Ministry of Public Security, from January to November 2008, Bin Yue had only 5,243 vehicles. If the sales cannot be quickly improved, not only the distributors, but also the upstream suppliers may have unstable factors.

Jianghuai Automotive hopes to usher in a turnaround in 2009. In addition to the national automobile revitalization plan, Jianghuai Automobile revitalized its power source as its main source of profit for sales of JAC Ruifeng commercial vehicles and cars. In addition, JAC is currently Brewing a grid sales plan. The first is to establish a large-scale automobile supermarket in 50 counties and cities across the country, and to display and sell the JAC light trucks, heavy trucks, buses, cars, and MPVs. Followed by sales of JAC sedan and Ruifeng commercial vehicle.

“The strong wind power dealer with a large number of dealers can play a role in quickly driving sales of JAC cars. The difference between the two brands is very small,” said Chen Wenkai, president of Gasgoo.com. Another person in the industry stated that JAC passenger cars should not be sold with commercial vehicles at the beginning of their creation.

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