Sigh! Jianghuai Automobile, once the leader of domestic automobiles, has now fallen to the point of relying on OEM for a living.
At the close of trading on March 26, 2022, Jianghuai Automobile disclosed its 2021 financial report. According to the financial report data, in the whole year of 2021, Jianghuai Automobile achieved a total revenue of 40.2 billion yuan, down 6.11% year-on-year; the net profit was 200 million, an increase of 40% year-on-year, although the performance increased profits did not increase revenue, but it did not look too bad.
However, in fact, this increase in net profit is only the "fig leaf" of JAC Motors, because a large part of JAC Motors' profits come from OEM for Weilai. From the perspective of deducting non-net profit, in 2021, Jianghuai Automobile achieved a loss of 1.884 billion yuan in non-net profit, which is a huge difference from the net profit. It is worth mentioning that this is the fifth consecutive year that Jianghuai Automobile has suffered a non-net profit loss, and a rough calculation shows that the total deduction of non-net profit loss of Jianghuai Automobile in the past 5 years has exceeded 6 billion.
As a former leading domestic automobile enterprise, Jianghuai Automobile can be said to have experienced the entire process of the domestic automotive industry from scratch, and has also made a lot of contributions to the development of the domestic automotive industry; however, now this veteran car company that has been established for 58 years has gradually declined, and in addition to the decline in performance, Jianghuai Automobile's sales have also been declining in recent years, and the quality of products is a continuous problem.
In 5 years, the non-deduction loss exceeded 6 billion, and he made a living by working for Weilai
As a veteran car company in China, today's Jianghuai Automobile has gradually become a foundry.
According to the data disclosed in the financial report, in the whole year of 2021, the cumulative sales of pure electric passenger cars of Jianghuai Automobile were 134,000 units, a substantial increase of 169.12% year-on-year. However, of the 134,000 pure trams, the number of OEM for NIO is about 93,000, and Jianghuai Automobile's own new energy passenger car sales are only more than 40,000.
From here, it is not difficult to see that most of the current production capacity of Jianghuai Automobile is actually placed on the OEM of Weilai.
Of course, OEM for NIO actually has great benefits. Since the signing of the foundry agreement with NIO in 2016, Jianghuai Automobile has obtained stable income with the help of WEILAI's growing sales, and the OEM income has become the most eye-catching part of the performance report of Jianghuai Automobile every year, especially in 2021, according to the financial report data, the net profit of Jianghuai Automobile in 2021 is 200 million, but the non-net profit is 1.884 billion yuan, the difference between the two is nearly 2.1 billion.
In addition, in addition to earning money for NIO, the costs required for the first three years of the foundry project need to be paid by NIO. According to the financial report data, from 2018 to 2020, Jianghuai Automobile confirmed loss compensation of 126 million yuan, 207 million yuan and 0.65 billion yuan, all of which were paid by Weilai, from this point of view, JIANGHUAI has become a stable business for Weilai.
However, everything is cons and advantages, although Jianghuai Automobile has obtained stable income for Weilai OEM, but on the other hand, the main business of Jianghuai Automobile has gradually fallen into a quagmire.
Judging from the latest data, from January to February 2022, Jianghuai Automobile Company's automobile sales totaled 86655 vehicles, down 5.76% year-on-year, and the sales volume declined significantly. From the perspective of financial reports, since the beginning of 2019, the revenue of Jianghuai Automobile has shown a clear downward trend, and in terms of specific data, jianghuai automobile has achieved revenue of 47.36 billion, 42.91 billion and 40.31 billion yuan respectively from 2019 to 2021, down 5.58%, 9.41% and 6.05% respectively year-on-year.
In addition, although it has obtained good income by virtue of the foundry business, the non-net profit of Jianghuai Automobile has been a loss for 5 consecutive years, and in terms of specific data, from 2017 to 2021, the deducted non-net profit of Jianghuai Automobile was -93.14 million, -1.877 billion, -978.4 million, -1.719 billion and -1.884 billion, with a total loss of more than 600,000 yuan in 5 years.
After 58 years of wind and rain, the history of Jacque Automobile
Although it has gradually declined today, it is undeniable that Jianghuai Automobile also had a glorious history.
Looking back at the development history of Jianghuai Automobile, the earliest should start from the "Chaohu Auto Parts Factory" in 1964. At that time, Chaohu Auto Parts Factory, the predecessor of Jianghuai Automobile, was only a small auto parts factory in Anhui, and its main business was only to provide auto parts for FAW Jiefang and Nanqi Yuejin, and occasionally take over the business of bus reconstruction and repair.
However, although it is only a small role, Jianghuai Automobile has learned a lot of technology in the process of providing parts for two car companies, which has laid a solid foundation for its later independent research and development of cars.
In 1968, with the establishment of the Anhui Provincial Automobile Group, Jianghuai Automobile began to show its skills in vehicle manufacturing. In 1969, the HF140 truck developed by Jianghuai Automobile landed, because of the excellent product quality and leading technology, it was not long before the HF140 truck began mass production, and Jianghuai Automobile also moved from auto parts to vehicle manufacturing.
From 1968 to 1990, Jiangling Motors has been deeply involved in the field of light trucks, when most of the domestic light trucks were produced by Jianghuai Automobile, and Jianghuai Automobile has become the absolute leader in this field; even now, many light trucks on the road are still Jianghuai brands.
Time to 2001, Jianghuai Automobile successfully landed in the A-share market, and it also began to transform from light trucks to passenger cars, Ruifeng models sold well after launch, in 2005 sales were the first in the country, and in the next decade, Jianghuai Automobile entered its most brilliant moment, almost every commercial vehicle was sold after launch.
So, why did today's JacHuai Automobile fall to where it is today? This may start with the serious product quality problems exposed in 3.15 in 2013. At 3.15 of that year, Tongyue Automobile under the Jianghuai brand was suddenly revealed to have serious quality problems, consumers were suddenly in an uproar, and the reputation that Jianghuai Automobile had accumulated was instantly destroyed, and it was also from that year that Jianghuai Automobile slowly went downhill.
Later, although Jianghuai Automobile and Volkswagen cooperated, they did not set off too many storms. In 2016, Jianghuai Automobile signed a cooperation agreement with Weilai, and Jianghuai Automobile slowly became a foundry and fell into the current situation.
How far can the foundry go?
In fact, Jianghuai Automobile has fallen into the current situation, which has a lot to do with its business philosophy.
In the previous decades, Jianghuai Automobile has been producing light trucks and commercial vehicles, and the core of the pursuit is low price, practicality, and does not pay too much attention to the quality of products, which is why 2013 will be exposed to serious product quality problems.
Later, although it held hands with Volkswagen, It was still difficult for Jianghuai Automobile to change this concept, so sales declined. But in terms of OEM, Jianghuai Automobile does not need to invest too much in product research and development, only needs to help Weilai build the car well, which can undoubtedly be done well for Jiangling, which has produced dozens of young cards and commercial vehicles.
However, although it is currently going quite smoothly on the road of OEM, Jiangling Motors is actually not without risks.
First of all, becoming a foundry of Weilai means that the lifeblood is in the hands of Weilai. However, in the past year, Weilai Automobile has shown signs of falling behind, and Weilai has not yet achieved profitability, in other words, the object of Jiangling Motors OEM, there is a certain uncertainty.
Secondly, after seeing the huge potential of the foundry business, many car companies are also interested in carrying out foundry business. For example, BYD, after opening up the e-platform 3.0 to the entire industry, got Didi's car orders; and Geely is the same, in addition to Foxconn, Luxun Precision and other non-car companies are also planning OEM business.
On the whole, although the FOUNDRY business is a good business, there are also no small risks behind it, and Jianghuai Automobile, which has decades of car manufacturing heritage, should not actually give up its main business, after all, compared to walking with one foot, two feet will go more steadily and go further.