Although it is not easy for Jianghuai Automobile to achieve a year-on-year turnaround under the impact of the sluggish automobile market and chip shortage, this seemingly good "report card" is not the result of the company's business activities. Recently, Jianghuai Automobile released its 2021 performance report. According to the data, Jianghuai Automobile achieved a total operating income of 40.213 billion yuan, down 6.11% year-on-year; achieved a net profit attributable to shareholders of listed companies of 200 million yuan, an increase of 40.24% year-on-year.
Although the turnaround turned a profit, the government's subsidy of 2 billion yuan played a decisive role. Aside from government subsidies, Jianghuai Automobile as a whole is still in a loss situation. This also means that Jianghuai Automobile's concern of relying too much on government subsidies is still very obvious. How to achieve self-hematopoiesis after "weaning" in the future is an urgent problem that Jianghuai Automobile needs to solve.
Government subsidies of 2 billion yuan become "heroes" to reverse losses
According to public information, Jianghuai Automobile was established on September 30, 1999, which is a comprehensive automobile enterprise group with five major business segments: commercial vehicles, passenger cars, buses, parts and automotive services. As a veteran local state-owned enterprise, Jianghuai Automobile has not developed smoothly in recent years, and since 2017, it has deducted non-losses for 5 consecutive years, with a total loss of more than 6 billion yuan.
According to the annual report, Jianghuai Automobile's non-net profit in 2021 showed a loss of 1.883 billion yuan, which is also the highest amount of loss in recent years. Thanks to the government's subsidy of up to 2.005 billion yuan, the net profit was turned into a profit. This also means that although Jianghuai Automobile has achieved a turnaround, its main business has not improved much. It is worth mentioning that the income of Jianghuai Automobile's "project research and development subsidy" has reached 1.19 billion yuan, but the subsidy for new energy vehicles is decreasing year by year, indicating that Jianghuai Automobile is striving to promote the transformation and upgrading of enterprises with technology research and development.
It is understood that this is not the first time that Jianghuai Automobile has "relied on government subsidies to achieve a turnaround". In 2020, the company achieved a net profit of 143 million yuan, while the government subsidies received in the same period reached 1.302 billion yuan. According to the statistics of relevant media, from 2014 to 2021, Jianghuai Automobile has received more than 10 billion yuan in state subsidies. The continuous dependence on "government blood transfusion" also reflects the difficulty of Jianghuai Automobile's current operating conditions.
The data shows that in 2021, Jianghuai Automobile sold a total of 524,200 units, an increase of 15.63% year-on-year. Among them, the sales growth was mainly due to the growth of passenger car sales, but the passenger car segment of Jianghuai Automobile was an unprofitable business. Although the sales growth momentum is good, due to the negative gross profit margin of its passenger cars, there is a situation of "selling more and losing more", even if the sales data growth is beautiful, it will not help the related revenue growth.
Hope for "left to lead the public, right to win Weilai"
Although it was in a dilemma, Jianghuai Automobile did not shrink back, on the one hand, it reached cooperation with the new car-making force Weilai and became a Weilai Automobile FOUNDRY; on the other hand, it firmly hugged the thighs of Volkswagen through mixed reform. Jianghuai Automobile is preparing to take advantage of these two car companies and its own "advantages" to start a "second venture".
As early as April 2016, NIO has reached a cooperation agreement with JAC Motors, and several of NIO's mass-produced models are produced by JAC Motors. The JAC Weilai cooperation project has achieved fruitful results, and has delivered more than 100,000 vehicles since it was put into production in 2018. Not long ago, JAC Automobile and NIO motor renewed the OEM agreement plan again, and JAC will continue to produce ES8, ES6, EC6, ET7 and other possible NIO models, with a production capacity of up to 240,000 units.
Not only betting on Weilai Automobile, Jianghuai Automobile has also completed an agreement to further deepen the joint venture cooperation with Volkswagen and explore a new model of deepening the mixed reform of large state-owned enterprises. After the official landing of the joint venture project between the two parties, the Volkswagen Group is willing to award the mainstream brand and a series of new energy products under the joint venture Volkswagen Group. The joint venture will gradually expand its scale and aim to reach an annual production of 350,000 to 400,000 units by 2029.
In addition, Jianghuai Automobile has also begun to "move the knife" on its own product structure. Thanks to the blessing of volkswagen brand and technology of Volkswagen Group, the new energy industry represented by Jacque Automobile will continue to rise. According to the plan, based on the "MIS Haoxue Architecture" technology brand, the Sihao brand will launch a rich product matrix of pure electric coupe E50ARPro and pure electric SUV E60X this year, and will also launch a new dedicated platform in the next five years, targeting a scale of 300,000 vehicles.
It is reported that Jianghuai Automobile will become bigger and stronger commercial vehicles in 2022, and concentrate on the development of intelligent vehicles and intelligent new energy vehicles. In addition, Jianghuai Automobile plans to produce and sell 568,000 vehicles and chassis this year, an increase of 8.36% year-on-year, and is expected to achieve a total operating income of 45 billion yuan, an increase of 11.63% year-on-year.
JIANGHUAI Automobile may have realized its current situation and its own "advantages", so from the foundry of Weilai to the joint venture with Volkswagen to the new energy sector, Jianghuai Automobile has laid a good foundation for its future take-off. In the case of intensified market competition, although the road of Jianghuai Automobile to achieve a headwind reversal with the strength of its partners is not easy, as a well-established local state-owned enterprise, it is not impossible for Jianghuai Automobile to achieve a headwind reversal.