Full speed ahead for Jetcon's entry to Caribbean export market

BY KARENA BENNETT
Business reporter
bennettk@jamaicaobserver.com

Friday, June 29, 2018

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Despite complications with recently implemented pre-shipment inspection for vehicles entering the island, Andrew Jackson, managing director of Jetcon Corporation Ltd, has reaffirmed his confidence in the company's decision to break into the export market guided by its primary advantage to get vehicles to Caribbean markets in 14 days.

Jackson, who was speaking at Jetcon's second annual general meeting since its listing on the Jamaica Stock Exchange, last Tuesday told shareholders that the company is looking to aggressively compete with other players in the market and will play on its ability to deliver the vehicles faster.

“There is a service that takes cars to the eastern Caribbean from Jamaica and that happens every two weeks. To get a car out of Japan to the east Caribbean, it all comes through Kingston, so you [can] imagine it takes about six to eight weeks of transit time to get there,” Jackson said.

“We can have [the vehicles] there in two weeks. We understand the challenges, but it's something that we think will take a little time to develop but we think it will work out favourably down the road,” he continued.

Pre-shipment inspection, which is aimed at protecting buyers from discrepancies in vehicle model year and odometer, was implemented on February 1. The Government employed the services of a company in Japan which will examine all used vehicles before they are shipped to Jamaica.

The initiative has however received some backlash from local car dealers who argue that the measures will not only increase the cost of vehicles to consumers from inspection fees and custom duties, in addition to delaying the time in which vehicles are delivered.

“It has created some anxiety among everyone — suppliers from Japan, dealers in Jamaica. What we have been able to do to mitigate the risk is the large inventory that we carry. Before this new operation it would take us four to six weeks to order and get a car in Kingston; now it's taking about three months. But we have a high buffer stock,” Jackson reasoned.

Inventory of the company currently stands at $400 million, up from $250 million in December 2016, covering roughly four months of vehicle transactions for the company.

Last year Jetcon leased space as a client inside the special economic zone, operated by Kingston Wharves Ltd (KWL) giving the company storage space at the port company's Tinson Pen complex for vehicle imports. The pre-owned car dealer plans to distribute cars to Caribbean markets and is already in negotiations with suppliers in Japan. Jetcon would be the first Jamaican company to engage in cross-border trade of second-hand vehicles.

The company sells 80-100 cars per month to Jamaican buyers, trading mostly Subaru, Mazda and Nissan, and a limited range of Toyota brands, such as Axio, Fielder and Probox. However, Jetcon aims to quadruple business through the export initiative.

Jetcon's lease arrangement with KWL has not only led to cost savings in the company, but has also allowed the pre-owned car dealer to free up space for it capitalise on other revenue streams to boost bottom line. The company has since added a spray room for faster turnaround in the spraying of vehicles regardless of weather conditions. Jetcon is also focused on improving its maintenance and service department.

“There are a number of things that we are doing to get us in a better position to pull our customers in and become a more profitable operation,” Jackson said.

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