JAC's 2014 profit plunges 42% on soft demand
Jianghuai Automobile Co.'s net profit tumbled 42 percent to 529 million yuan ($85 million) last year as deliveries of the state-owned automaker's sedans and commercial trucks declined sharply.
Sales of trucks, truck chassis, vans, multipurpose vehicles, SUVs and sedans dropped 10 percent to 446,800, the company said. The slump in volume was caused mainly by weak demand for sedans and trucks.
Last year, JAC cut sedan production to avoid competing directly with global brands. Meanwhile, it increased MPV and SUV production to exploit robust domestic demand in those segments.
As a result, MPV sales surged 31 percent to 71,267, and SUV deliveries more than doubled to 71,487. But sedan sales plunged 54 percent to 52,816.
Last year, the Chinese government required that newly produced light trucks must meet emission standards equivalent to Euro IV. The requirement pushed up prices of new light trucks by more than 20,000 yuan per unit.
Because of the price jump, many small businesses delayed the purchase of new light trucks. And some took advantage of a regulatory loophole to buy cheap, low-speed light trucks instead.
JAC's truck deliveries dropped 15 percent to 219,385.
JAC, in the east China city of Hefei, is listed on the Shanghai stock exchange.
Last year, JAC cut sedan production to avoid competing directly with global brands. Meanwhile, it increased MPV and SUV production to exploit robust domestic demand in those segments.
As a result, MPV sales surged 31 percent to 71,267, and SUV deliveries more than doubled to 71,487. But sedan sales plunged 54 percent to 52,816.
Last year, the Chinese government required that newly produced light trucks must meet emission standards equivalent to Euro IV. The requirement pushed up prices of new light trucks by more than 20,000 yuan per unit.
Because of the price jump, many small businesses delayed the purchase of new light trucks. And some took advantage of a regulatory loophole to buy cheap, low-speed light trucks instead.
JAC's truck deliveries dropped 15 percent to 219,385.
JAC, in the east China city of Hefei, is listed on the Shanghai stock exchange.
