Behind Profits: Jianghuai's Ups and Downs and Fukuda's Rise

In 2009, the profit of Jianghuai Automobile Co., Ltd. increased by 1667.3% year-on-year, which is the highest increase in profits of commercial vehicle companies. A longitudinal comparison of its net profit and profit rate over five years finds that: behind the high profit growth, it is not profitable and shows ups and downs in continuous time.

In 2006, the net profit rate of Jianghuai Automobile was the highest in the statistical time period, which means that during the five years it was the strongest profitability of the company. In 2007, it fell to a deterrent, and in the following three years, it has been at a low level.

According to JAC's annual report in 2006, Jianghuai vigorously consolidated its leading position in the field of commercial vehicles, intensively cultivated the existing products at that time, and achieved very good results on MPVs, light trucks, etc. Heavy trucks made great progress and became new growth. point. The optimization of product structure and deepening of specialization have greatly enhanced JAC's profitability.

The 2007 annual report revealed that the JAC sedan was listed. This is a big move that breaks through the development bottleneck. In the strategic transition period of the Jianghuai, the investment is large and the output is lagging, which leads to a decline in profits and poor profitability. In 2008, mainly due to passenger car drag, JAC's total annual profit decreased by 94.58%, operating profit fell by 98.74% year-on-year. As can be clearly seen from the figure, in the 3 consecutive years after 2007, the JAC sedan project has a low profitability level. It is understood that the profits of other products also showed a downward trend. It can be seen that after the expansion of production, JAC has not fundamentally changed the operating environment of the company. The bottleneck of development has not been fundamentally resolved.

Recently, Times Weekly published the article "Zuo Yan'an's Scalarization of Jianghuai Limousin's Three Years". It has been reported that Jianghuai has integrated the two marketing channel systems for multi-purpose vehicles and cars since the implementation of the Jianghuai passenger car strategy. JAC Passenger Car Company, which integrates production and sales, was formed. Insiders revealed that after the integration of marketing channels, the sales of commercial vehicles and cars have increased significantly. However, the sudden increase in outlets has caused vicious competition within the company.

The twists and turns of the JAC sedan road can be seen.

Coincidentally, Foton Motor also launched a sedan in 2007. Compared with JAC's ups and downs, Futian’s net profit has steadily increased over the past five years.

Futian had a loss of 297 million yuan in 2005. The reasons for the analysis in the annual report are twofold: on the one hand, due to rising prices of production materials such as steel, continuous power and energy shortages, increasing production costs and diminishing profitability; on the other hand, Affected by the macro environment and related industrial policies, the sales of medium and heavy trucks have experienced a significant decline. At the same time, most of Foton Automobile's internal product lines are in the process of structural adjustment, so the amount of losses is large.

After the "freezing" in 2005, Futian achieved a full range of commercial vehicle development in 2006 and continued to implement the adjustment from the extension of expansion to the growth of intension. This idea may be the key to the steady growth of Foton. On this basis, in 2007, Futian stepped up efforts to adjust the product structure and business structure, increased the overall profitability, and also increased the investment in technology and independent brand R&D. In consecutive years, the achievements of climbing steadily are obvious.

Before entering into the field of passenger vehicles, JAC had quite good results. After entering, the development trend fluctuates. Behind the high profit growth, the actual profitability is weak. The same is true for commercial vehicles entering the passenger car market. Given the steady development of Foton and the steady brand strength of the brand, the future of Jianghuai will be more powerful and worthy of deep thinking.