2 days ago
2
Jetcon aims to speed past its $74.3 million year-end loss by focusing on new car sales instead of its used car business.
Declining revenues, exacerbated by an increasingly competitive environment especially since the COVID-19 pandemic pushed the 31-year-old used car company to exit that market.
Executive chairman, Andrew Jackson cited financing challenges and shrinking margins as reasons for exiting the used car market. “Competing now is just almost impossible,” he told The Financial Gleaner.
To December, audited figures showed that new cars made up 40 per cent of the $160 million total inventory, with used cars making up the rest. Jackson said the inventory now favours new cars. The transition to new cars led to decreased sales, with many sold at or below cost. Jackson noted that selling used electric vehicles also hurt the company: “Electric cars were sold well below cost”.
The inventory sell-off meant that just about $520 million went to the company’s topline, less than a half of pre-COVID-19 sales.
Jetcon has scaled back on land usage since it scaled back on used cars inventory. It owns three properties. The headquarters are located on Sandringham Avenue, with properties on Molynes Road and Dumbarton Road.
“We don’t need as much space right now. So, we have a lease arrangement with a neighbour for parking,” Jackson said of the alternate use of the Molynes Road property,” he added.
Jackson stated that the company’s accountants had revalued the three properties. The increased non-cash value was recorded as total comprehensive income. Jackson clarified that it is not taxable because it does not represent “real income”.
In addition the Dumbarton Road property which previously stored cars in the company’s large inventory will now house the company’s solar business. The Sandringham property will continue to house Jetcon’s regular car business.
Jackson says except for a few odds and ends Jetcon has practically completed the transition to new cars with nothing more than six used cars left on its lot. The company had spent about $60 million to transform the look and feel of the former administrative building with enough showroom space for eight cars.
Sales of the new Beijing Automotive Industrial Corporation, BAIC, cars are said to be ‘better than expected. “Our biggest challenge right now is getting them here,” Jackson said frankly, noting that shipping and logistics and are causing delays with back orders.
“What has happened to us is that there’s a delay between ordering and receiving, like a four month delay,” he said adding that the inventory was sold out faster than expected.
“So, there’s a gap between that and actually getting the new set of cars.”
Jackson is optimistic about expanding Jetcon’s model lineup, starting with the Beijing X55 and BJ40, and now considering the smaller X35 and larger BJ35 models. Despite annual loss in 2024, he believes the first quarter results will show a return to profitability soon, complying with Stock Exchange rules by not disclosing more details.
“We will be back in the black,” said Jackson.
English (US) ·