JAC's sales and sales report released on January 5 showed that passenger cars, commercial vehicles and chassis were sold last year, with 37,800 units in December last year, an increase of nearly 52% year-on-year; annual sales were 448,800 units, down 3.78% year-on-year. The MPV business, the main source of its profitability, saw a 9.19% year-on-year decline, and JAC's sedan sales also fell 5.25% year-on-year from 145,920 units to 138,264 units.
Commercial vehicle performance decline
Last year, the cumulative production of Jianghuai Multi-purpose Vehicles (MPV) totaled 491,896 vehicles, which was a year-on-year decrease of 2.83%. Cumulative sales totaled 493,396 vehicles, a year-on-year decrease of 0.87%. Jianghuai Automobile's decline in both MPV production and sales last year was far beyond the industry level. The data shows that during the first 11 months of last year, Ruifeng's sales decreased by 9.69% year-on-year.
“From the traditional commercial vehicle business to the passenger vehicle business, it can be said that this is not a good choice for JAC,†Zhang Zhiyong, an automotive analyst, told reporters. “The passenger vehicle market has its own technical requirements and management experience. When JAC enters this market, it not only means that it will give up its commercial vehicle business advantage, but also the input cost."
Unlike companies such as the Great Wall and Geely, JAC has invested heavily in the development of its passenger vehicle business while strengthening its commercial vehicle business. Similar to the 2.8 billion yuan increase plan issued by Jianghuai in April last year, RMB 2.2 billion will be used to build a passenger car base expansion project, add a B-class vehicle production line, and another RMB 600 million will be invested in an annual output. 200,000 high-performance gasoline engine projects. However, this additional issuance was eventually withdrawn by JAC, and 2.8 billion yuan was invested in batches through JAC's own funds and bank loans.
In addition, JAC subsequently passed three investment plans using its own funds, including the HFC7131 sedan new model body mold fixture project, 150,000 dual clutch automatic transmission (DCT) projects, and an annual output of 50,000 DCT automatic transmission gears. Shaft project, a total investment of 1.2 billion yuan.
With such a large investment in the passenger vehicle business, it can be seen that Jianghuai has great determination. However, under the condition that JAC currently only sells one model of Heyue, it is still unclear how long it will take for the passenger car business to realize the return in the future. On the contrary, MPV is still the highest product of JAC's current gross profit, which contributes about 1/3 of the company’s profits. The decline in sales volume will inevitably affect the company’s profitability.
It is understood that although the MPV market accounted for only 3.18% of the market share of passenger cars in 2012, the annual sales volume still reached 493,400. Currently, the MPV market is dominated by the Lingzhi, Buick GL8 and King Plaza in the top three MPV markets. The four-point refiner also seems to have been further deterred by his opponents and their advantage has diminished.
Refine S5 ambitious
At last year's Guangzhou Auto Show, JAC released the “Double Brand†strategy. Its new products were classified into the two brands “Rui Feng†and “He Yueâ€, respectively, adopting the “brand alphanumeric†naming method.
“The changes brought about by the brand integration to JAC in the future are mainly reflected in the upgrading of existing products. In the future, only the models of Ruifeng and Heyue will be upgraded, and there will be no more than six lines of operation. , Yueyue and Tongyue will be integrated into the name of Yue and renamed.†Jianghuai executives said at a press conference earlier.
The Refine S5 is the first model to be launched after the Jianghuai "Double Brand" strategy, and both the company itself and the market have great expectations for it. Yang Shiqin, Assistant to General Manager of JAC Passenger Vehicles, even said that the S5 is based on the Beijing Hyundai ix35, but its competitors mainly include BYD S6, Chery Tiggo and Haval H6.
"The future Ruifeng S5 will host 1.8VVT and 1.5TGDI versions," said Wang Baoqing, deputy general manager of Jianghuai Passenger Car Company. It is reported that, Ruifeng S5 is expected to officially listed in March, will launch 1.5T, 1.8T, 1.8VVT and 2.0L three displacement four models, of which 1.8T models will be the first to market, 2.0L models followed. 1.8VVT is expected to be officially listed in August this year.
"1.8T will achieve optimal power while satisfying the purchase of official vehicles." Tao Zhi, deputy general manager of multi-functional marketing company of Jianghuai Passenger Vehicle Co., Ltd. stated that the S5 is only part of the mid-to-high-end plan. The Ruifeng brand is building a C-class car A6. And A8, mainly for the official car market.
According to data from the Sohu Automobile Production and Sales Database, the sales of Ruihua, the first SUV model of Jianghuai Automobile, fell 27.79% year-on-year in the first 11 months of last year, and monthly sales did not even reach the level of 1,000 units. As for the Refine S5, which is positioned as an urban SUV, JAC is ambitious and plans to sell 80,000 vehicles this year.
For such an impulse model, the aforementioned analysts expressed their own concerns. “At present, although the growth rate of the Chinese SUV market is still relatively fast, it is difficult for Jianghuai to achieve this sales volume in the event that many companies rush to eat this piece of cake. It is quite large. The input-output ratio must be considered by Jianghuai."
According to media reports, the annual meeting of dealers of Jianghuai Automobile Group in January had become a "seeking" car club. Dealers are not only worried about sales in 2013 but are eager to ask for more models.
In the future, Jianghuai will place its hopes on Yueyue and Ruifeng, and plans to wait for Heyue to achieve the market size of Class A and Class A vehicles. After Refine has confirmed the status of the Class C market, Class B and B will be launched. Earlier, with the completion of the third factory of Jianghuai Passenger Cars, the total capacity of JAC's passenger vehicles has also reached 540,000. With the further increase in the production capacity of cars and lower costs, JAC Passenger Vehicles also calculated that overall profitability will increase significantly.
“In 2013, China’s auto market is expected to remain in a stage of slight growth. Under the circumstances where various changes will occur or have occurred, companies will face more complicated situations. The stronger the stronger, the weaker the weaker or will be eliminated eventually. The aforementioned analyst said. Recently, Jianghuai Automobile announced that it has signed a joint venture agreement with Spanish Santander Consumer Finance Corporation to establish an auto finance joint venture company. Some analysts believe that auto finance will become the key to the rescue of the market in the period of micro-growth.
“From the perspective of the development of the automotive industry, a complete automotive industry chain not only has automotive parts, automotive sales, but also the automotive aftermarket. The presence of the automotive aftermarket can greatly boost the sales of automotive products and enhance the acquisition of OEMs. Financial capability is a very important part of the automotive aftermarket. At present, China's automotive market is very weak in automotive finance, making the industry chain not well connected, and the establishment of auto finance companies to make up for this weak link is to promote Jianghuai Automobile Industry's strategic layout is an important measure.†In the mature automotive market in Europe and America, many multinational car manufacturers' manufacturing and sales links are close to zero profits, and they rely more on the high-profit survival of auto finance companies.
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