On July 14, Jianghuai Automobile announced that the board of directors of the company reviewed and passed the "Proposal on Investing 30,000 Light Passenger Vans by Using Their Own Funds", and proposed to use 592 million yuan of its own funds to invest in Baohe Industrial Area of ​​Hefei City. 30,000 light vans (large MVP) projects. In addition, JAC will also set up a joint venture in Vietnam with its own funds and Vietnam Transport and Transportation Investment & Cooperation Import & Export Corporation and Junye International (Hong Kong) Co., Ltd.
MPV new project is expected to return to the original within 6 years
It is understood that Jianghuai Automobile intends to invest 592 million yuan in investment in Hefei to build 30,000 MPV projects. This project is a new construction project and will be implemented in the Baohe Industrial Area of ​​Hefei City. It will build stamping, welding, painting, assembly and assembly lines and related equipment (including land and factory buildings) to form an annual capacity of 30,000 light passenger trucks. The products produced are Jianghuai Automobile's external design agency, independent development, and light passenger cars (large MPVs) with independent intellectual property rights. After the initial budget, the project can achieve an annual sales income of 3.58 billion yuan, an annual total profit of 450 million yuan, and an investment recovery period of 5.49 years.
Analysts believe that the expansion of JAC's production capacity is directly related to the good performance of the light truck and MPV market in the first half of this year. It is understood that in the first half of this year, Jianghuai Automobile produced a total of 146,027 vehicles and chassis, an increase of 14.82%; sales of 145,665 units, an increase of 13.92% compared with the same period of last year. As traditional businesses, MPVs and light trucks have been the main source of profits. From January to June this year, Ruifeng MPV sales ranked first in the industry, with a market share of approximately 21.66%. Its product sales accounted for about 35% of the company's total vehicle revenue, and its profit contribution rate was about 70%. The Jianghuai Light Truck Co., Ltd. sold 11,587 vehicles in June and sold more than 10,000 yuan in four consecutive months. In the first half of the year, the domestic market achieved a total sales volume of 73,716 vehicles, up 20% year-on-year. Among them, the handsome bell equipped with Jianghuai 4DA1 National Three Engines sold only 3,100 vehicles in the Beijing market in the first half of this year, an increase of 242% year-on-year.
Vietnam builds a joint venture to build light trucks
The report released also revealed that in order to further enhance overseas competitiveness and open up overseas markets, Jianghuai intends to use its own funds with the Ministry of Transport of Vietnam, Ministry of Transport, Investment, Cooperation and Import and Export Corporation, and Junye International (Hong Kong) Co., Ltd. in Vietnam. A joint venture company was established to mainly manufacture, sell, and service JAC light trucks, lightweight engineering dump trucks and accessories, and gradually expand to Other JAC products according to the company's development. The company plans to split the two phases, and accumulative capital contribution will not exceed 4 million U.S. dollars, accounting for 51% of the total equity of the joint venture Jianghuai Automobile. Analysts pointed out that Jianghuai Motor’s move was to advance the layout of overseas markets and seize the opportunity in the crisis.
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Thanks to the overall economic situation and the country’s policy of returning home to the countryside, in the first half of this year, China’s light truck production and sales volume reached 740,900 units and 748,800 units respectively, representing an increase of 8.4% and 6.04% year-on-year, indicating a good growth trend. Major sales of light trucks such as JAC, Dongfeng, and Futian have all experienced significant growth. Among them, the performance of JAC light trucks is particularly prominent. In June, there were 11,587 domestic sales, and sales exceeded 10,000 for four consecutive months. In the first half of the year, the domestic market achieved a total of 73,716 sales. , an increase of 20% over the same period last year. The increase ranked first in the three major light truck companies.
Gu Dehua, general manager of light truck marketing company of Jianghuai Commercial Vehicle Co., Ltd., believes that the strong growth of the entire light truck industry has first benefited from the promotion of national policies. For JAC light trucks, the growth mainly comes from the blowout of hometown business, sales of light trucks to the countryside, and the gradual expansion of the mid- to high-end light truck market. The sales of 73,000 units in the first half of the year were also reflected in the advance market layout and integrated marketing effects of JAC light trucks.
As for the light-duty situation in the second half of the year, Gu Dehua predicted that China's rural auto market has just started, and the huge purchasing potential has not yet been released. The light-to-the-county direct subsidy policy set on June 10 will further stimulate the strong growth of the rural light truck market. The three national standards that will be fully implemented on July 1 will help promote the growth of the mid- to high-end light truck market. Its role is expected to gradually show up after August.
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