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2019 is destined to be a sad year, but for Jianghuai Motor, it seems to be even more sad. The profit in the first quarter fell by 70%. In April, the joint venture company with Volkswagen was under pressure to adjust its share currency. In May, it received an inquiry letter from the Shanghai Stock Exchange due to a sharp decline in operating data in 2018. After formally replying to the inquiry from the Shanghai Stock Exchange in June, it received the "Administrative penalty decision" from the Beijing Ecological and Environmental Bureau in July.

Jianghuai Automobile was punished because three trucks were randomly inspected. The test found that the functional test of the on-board diagnosis system did not meet the requirements of the standard and should not be sold as qualified products for emission inspection. Therefore, the Beijing Municipal Bureau of Ecological Environment determined that Jianghuai Motor had "shoddy" behavior, confiscated illegal income in accordance with relevant regulations, and imposed a fine of twice the value of the goods, totaling 170 million yuan.

Jianghuai Motor reported net profit of-786 million yuan in 2018, down 282.02% from the same period last year. Net profit in the first quarter of this year fell sharply by 69.13% from a year earlier. The market performance is still lacklustre, with JAC sales of 235000 vehicles in the first half, down 6.78 per cent from a year earlier. There are signs that the development of Jianghuai Automobile in 2019 is not more optimistic than that of last year. Some analysts believe that the 170 million yuan fine is a lot of pressure for Jianghuai, which is in poor condition recently, but this penalty has a more serious impact on Jianghuai's brand image, or further affects the market performance of enterprises in the second half of this year.

Through the inquiry, it was found that this is not the first time JAC has had emission problems. In 2014, Jianghuai heavy truck was reported by CCTV that it pretended to be the fourth by changing the generator model and code on the vehicle certificate.

The penalty is also due to the fact that some cars sold in Beijing meet the national five-year emission standards by cheating. Jianghuai Motor said that it agrees with and accepts the punishment of the Beijing Bureau of Ecological Environment, and admits that vehicle emissions are prolonged or not rigorous enough, but there are no subjective mistakes.

At present, a number of regions have begun to implement State VI, and it is inevitable that there will be suspicion when emissions fraud is exposed on this node. However, from the progress of its own brand, the enthusiasm of Jianghuai Automobile is not high. At present, the sales of Jianghuai fuel vehicles are declining significantly, but the main models have not been launched in the sixth edition of the country.

Jianghuai Automobile started as a commercial vehicle, and when the current car market is declining, Jianghuai Automobile has gradually shifted its focus to new energy vehicles. According to data, sales of pure electric vehicles in June were 9842, up 429.42% from a year earlier. Sales of pure electric vehicles in the first half of the year were 39000, up 95.01% from the same period last year. However, fuel vehicles and commercial vehicles have dropped sharply, with sales of less than 1,000 vehicles in half a year.

The growth of sales of new energy models can be regarded as a relief for the current situation of Jianghuai Automobile. On the one hand, the cost of new energy is higher, on the other hand, the subsidy to the account after the sale of new energy is slow.

In recent years, the decline in model sales and increased investment in new energy have led to poor cash flow, so we can only hope to make a breakthrough in fuel passenger cars. According to the plan, JAC plans to launch a slippery-back A-class sedan by the end of this year, a 6-7-seat SUV in the first half of next year and a compact SUV based on a new platform in 2021.

At present, great changes have taken place in the competitive environment of China's car market, and brand power has a greater and greater impact on model sales, which is obviously a deficiency of Jianghuai automobile, and the emission fraud incident makes it even more difficult.

JAC launched its key model Ruifeng S4 at the end of last year. At present, the monthly sales of Ruifeng S4 are only 500 to 600, and the monthly sales of the two cars are only more than 100. therefore, we still do not know whether the continued launch of new cars and SUV models can change JAC's plight.

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