USED car dealer Jetcon Corporation Limited is shifting its focus towards new car sales as the market for pre-owned vehicles becomes increasingly challenging.

In its recent unaudited financial statements, Jetcon noted that banks continue to offer more favourable lending rates for new car purchases compared to used cars, contributing to the stagnation of used car sales. As a result, the company is adapting by shifting its focus towards new car sales, specifically with the BAIC brand, from out of China, which has received positive feedback so far. Resources will be increasingly transferred from used car sales to new sales as new sales pick up. According to Managing Director Andrew Jackson, Jetcon plans to continue selling both used and new cars, but the focus is likely to shift towards new sales.

“We expect to be doing both,” Jackson told the Jamaica Observer in an interview. “We don’t know where we’ll end up, but we’re looking at doing both. We suspect it will be more new than used.”

Under its inventories for 2023, used motor vehicles saw a significant decrease from $192 million in 2022 to $114 million in 2023. This number is expected to decrease further as the company acquires two additional parcels of land adjacent to an existing location, valued at over $150 million. According to Jackson, the intention is to use this land for Jetcon’s new car dealership, which will be the sole distributor of the BAIC Chinese car brand. The dealership, slated for completion in 2025, will launch with two models from the car brand. As of December 2023, Jetcon had recorded over 33 million new cars in its fleet.

Also listed under its inventories were approximately $65 million worth of solar products. Jetcon plans to increase solar product sales, which have been consistently profitable for the company. Combined with new car sales, the importation and distribution of solar products are expected to generate the majority of revenue over the next 12 months, with significantly higher profit margins than used car sales. As part of its strategic plan, the company ventured into importing and distributing solar panels for the first time in late 2022. This is an area Jetcon intends to continue investing in, as the shift towards electric cars gains momentum. According to Jackson, electric cars and solar energy have a symbiotic relationship, making them a natural fit for the company’s future plans.

“We expect to be a major player in the solar equipment business within two years, with its panels, inverters, batteries, and all the elements that go into building a solar system. It’s a growth area right now,” he said.

The balance sheet shows inventories totalling $400 million, comprising used and new vehicles as well as solar products, while receivables total $97 million, including deposits on import purchases.

The decline in used car sales had a negative impact, with the cost of sales decreasing by 37 per cent to $112 million from $154 million in the previous year. Although the company managed to reduce net losses by nearly half, compared to the same period in 2023, with a net loss of $0.89 million compared to $1.76 million last year for the first quarter of 2024, it had to implement internal cuts. The average number of full-time employees decreased from 28 in 2022 to 15 in 2023.

“The staff cuts were through attrition; we didn’t have a programme in place, and when people left, we didn’t replace them,” said Jackson.