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In the depressed environment of the car market, it is difficult for both independent brands and joint venture brands, especially for lesser-known brands to gain a foothold in the auto market. Jianghuai Automobile, a car company with a history of more than 55 years, the current development has also suffered a lot of setbacks, and there are no longer a few disputes on the body.

In May 1964, the predecessor of Hefei Jianghuai Automobile Factory (Chaohu parts Factory) was established. Jianghuai Automobile has been a comprehensive automobile manufacturer integrating the R & D, manufacture, sales and service of commercial vehicles, passenger vehicles and powertrain. Among them, the whole vehicle products are divided into passenger vehicles and commercial vehicles, passenger vehicles include SUV, MPV, cars, IEV pure electric passenger vehicles and other products, commercial vehicle products include light trucks, heavy trucks, multi-purpose commercial vehicles, passenger cars and other products.

In March this year, there were media reports that Jianghuai would sell its second passenger car factory to Jianghuai Volkswagen, which mainly produces Sihao brand new energy vehicles. Then Jianghuai Motor denied the rumor that "the report is not true."

Insiders said that the reason why Jianghuai Automobile is rumored to sell the second plant to Jianghuai Volkswagen is mainly because Jianghuai Automobile has not made considerable sales and profits in recent years and is living on government subsidies.

According to the data, JAC sales reached 643000 in 2016, and by 2017, JAC Volkswagen's sales fell to 511000, down 20.58% from the same period last year; in 2018, JAC sales were 462000, down 9.48% from the same period last year; in 2019, JAC car sales still did not improve, with cumulative JAC sales of 353500 vehicles from January to October this year, down 10.52% from the same period last year.

The sharp decline in sales has led to a continuous decline in Jianghuai car profits. In 2016, the net profit of JAC was 1.161 billion yuan, up 35.49% from the same period last year; after the decline in sales in 2017, the net profit of JAC was 431 million yuan, down 62.83% from the same period last year; the net profit of JAC in 2018 was-786 million yuan, down 282.02% from the same period last year; in the first three quarters of this year, the net profit of JAC was 121 million yuan, up 154.33% from the same period last year.

JAC's net profit rose in the first three quarters, which has a lot to do with the government's compensation.

Jianghuai Motors announced on Sept. 18 that due to the planning and construction requirements of Hefei Metro Line 5, the government levied property owned by Jianghuai Motor, and Jianghuai Motor received 211 million yuan in compensation. After the transaction, JAC expects its net profit to increase by about 200 million yuan in 2019, surpassing JAC's net profit level of 125 million in the first half of the year.

In July this year, Jianghuai Motor was fined a total of 170 million yuan by the Beijing Municipal Bureau of Ecological Environment for fraudulent emissions from its trucks. This "sky-high ticket" has a direct impact on the profitability of Jianghuai Automobile.

The increase in JAC's profits mainly comes from government subsidies. According to statistics, JAC received a total of 8.718 billion yuan in government subsidies between 2014 and 2018, while JAC's net profit in recent years was 2.225 billion yuan, with an actual loss of more than 5 billion yuan. Emissions fraud is also the main reason for its profit loss.

It has been 15 years since JAC announced its entry into the car market in 2004, but now it is going downhill, and there are many problems in sales decline, profit loss, low model innovation and product quality.

JAC sold 138300 cars in 2012, but instead of expanding its car and MPV business, JAC focused on SUV models. JAC sold 33815 SUV models in 2013, up 273.32% from the same period last year, while car model sales fell 16.55% from a year earlier.

In 2014, Jianghuai Motor first launched Ruifeng S3 to seize the small SUV market, and became a popular model on the market. Thanks to the launch of Ruifeng S3, sales of Jianghuai SUV models increased year-on-year from 2014 to 2016. From 2014 to 2017, Jianghuai SUV model sales were 71487, 253067 and 275520 respectively, an increase of 111.41%, 254% and 8.87% over the same period last year.

Jianghuai Automobile, which could have continued to become bigger and stronger in the SUV market, put forward the strategy of "attaching equal importance to passengers and businessmen" in 2016 to develop commercial vehicles and new energy vehicles while developing passenger vehicles.

Since then, the decline in Jianghuai car sales has become increasingly serious. In 2017, JAC SUV model sales were 121334, down 55.96 per cent from the same period last year.

The same is true of new energy vehicles. Jianghuai Automobile began to develop new energy vehicles as early as 2010, but the new energy vehicle business can not be bigger and stronger due to uneven distribution of resources. Today, JAC has a number of new energy vehicles, but most of them are modified from fuel vehicles, lack of technology and innovation, and even suspected of plagiarism.

Some industry insiders say that Jianghuai Motor has lost money year after year precisely because it "wants to do everything, but can't do anything well," which has caused a serious waste of resources. In recent years, sales of both commercial vehicles and passenger vehicles have declined significantly, coupled with the withdrawal of subsidies for new energy vehicles, which is undoubtedly even worse for Jianghuai Automobile.

At present, there are still many problems in the product quality of Jianghuai Automobile, whether by selling houses or government subsidies, it is not a long-term solution for Jianghuai Automobile. Only with core technology and excellent quality can it develop better. At present, there is not much time left for Jianghuai Motor.

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