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Motor Vehicle Sales Have Slipped And Continues Into 2023….Jackson

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Motor vehicle sales have slipped compared with the first quarter of 2022, and continues into April 2023 as well, however, we have seen positive development with monthly sales increasing month over month for 2023.

Revenues are however, down 29 percent compared to the first quarter in 2022. Gross profits fell by 35 percent, and net profits decreased from $10.2m to a small loss of $1.8m.

While prices of vehicles and shipping have stabilized somewhat, the increase in interest rates have stifled motor vehicle sales, however with the reduction of inflation and a fall in interest rates on Bank of Jamaica CDs and Government of Jamaica Treasury bill rates augur well for interest rates returning to more normal levels soon. We expect sales to recover as the year progresses. We have sold the majority of our stock of electric vehicles (EVs) and expanded our range to include another brand of EV and have more developments in the pipeline which will be disclosed when they become more concrete.

Andrew Jackson Managing Director JETCON Corporation

JETCON CORPORATION LIMITED INTERIM RESULTS First Quarter ended March 2023

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Jetcon Corporation Ends Third Quarter Of 2023 With Loss Of JA$7.1M As Management Explores New Vehicle Sales

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Jetcon Corporation ended its Third Quarter of 2023 with a loss of JA$7.1million, compared to a JA$$12M profit in the same period last year. This as sales continues its trend downwards to be roughly half those of last year.

Jetcon’ s statement of comprehensive income for the second quarter ended June 30, 2023 also showed a loss of JA$3.50M. This management said was due to prudent fiscal policy adopted by the company in the month of April 2023. This saw the company disposing of 10 vehicles which it carried on the books that were haemorrhaging in value. If these vehicles were sold at market value the company’s profit would have been $8.99 Million.

Jetcon also ended that second quarter with revenue decreasing 27 percent, to JA$184M, compared with the same period in 2022 and 28 percent for the half year to JA$363M. This according to management was mostly due to increased rates by the Bank of Jamaica which saw lenders preferring to invest available funds with the Bank of Jamaica rather than lending to those wishing to purchase vehicles.

Third Quarter Inventories totaled $419million, while receivables totaled $93million.

The company continues to grow inventory of solar equipment as they push to diversify operations to make it more resilient to economic shocks.

While used vehicle sales continue to stagnate, management is nevertheless beginning the exploration of new vehicle sales, a market which has seen increased sales year-on-year.

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Business Insights: How Does A Car Dealership Make Profits?

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Car dealerships make profits through various revenue streams. Here are the primary ways they make money:

Financing: Dealerships work with third-party lenders and the manufacturer’s lending arm to offer financing options to customers. The dealership earns a commission for every loan they secure, which can add up to thousands of dollars. The commissions often come as marked up interest rates on your loan

Selling add-ons: Dealerships make money by selling add-ons such as extended warranties, tire and wheel protection, and other insurance packages. With each sale of an additional item, the dealer is making some profit

Trade-ins: When a customer trades in their old vehicle as part of a new or used car purchase, the dealership can either resell the trade-in on their used car lot or sell it at an auction. The profit from trade-ins comes from the difference between the trade-in value given to the customer and the resale value of the vehicle

Service and parts departments: Dealerships make money through their service and parts departments. When you bring your car in for maintenance or repairs, the dealership charges you for the labor and parts. They may also try to sell you additional services or upgrades for your car, such as a new air filter or a brake service. Over the life of the vehicle, these additional services can add up to thousands of dollars in profit for the dealership

Markup on new cars: Dealerships make a profit by charging more than their invoice price (i.e., what they paid the automaker) for the new cars they sell. The profit margin varies depending on the brand, model, and market demand for the vehicle

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Jetcon Corporation Q1 Revenue And Profit Continues Downward Trend As Increases In Interest Rates Stifle Motor Vehicle Sales.

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Andrew Jackson Managing Director Of Jetcon Corporation Limited Has Released The Following Report To Shareholders For The First Quarter Ending March 2023

The board decided to release our first quarter results while we await the audit of the 2022 full year results which is not expected to deviate materially from the figures show for 2022 in the interim results.

The delay in releasing the audited 2022 results is regretted and it is expected that they will be released by June. In the meantime, the interim results should help investors to get a better picture of developments within the company.

Motor vehicle sales have slipped compared with the first quarter of 2022, and continues into April 2023 as well, however, we have seen positive development with monthly sales increasing month over month for 2023.

Revenues are however, down 29 percent compared to the first quarter in 2022. Gross profits fell by 35 percent, and net profits decreased from $10.2m to a small loss of $1.8m.

While prices of vehicles and shipping have stabilized somewhat, the increase in interest rates have stifled motor vehicle sales, however with the reduction of inflation and a fall in interest rates on Bank of Jamaica CDs and Government of Jamaica Treasury bill rates augur well for interest rates returning to more normal levels soon.

We expect sales to recover as the year progresses. We have sold the majority of our stock of electric vehicles (EVs) and expanded our range to include another brand of EV and have more developments in the pipeline which will be disclosed when they become more concrete.

For more information CLICK HERE

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Tesla Will Continue To Cut Prices On Its Electric Vehicles To Push For Higher Volumes

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Elon Musk indicated Tesla will continue to cut prices on its electric vehicles to push for higher volumes, even after the company took significant hit to profit due to markdowns. The news comes after several rounds of price cuts already this year, prompting speculation over whether the strategy comes from a position of weakness or strength. While Tesla is still the top seller of EVs, high borrowing costs and competition have meant its growth has slowed dramatically. “They’re going to use the room in their margin to create more demand,” Ben Kallo, an analyst at Robert W. Baird, said in a Bloomberg Television interview.

Tesla reported first-quarter earnings that missed analyst estimates after a series of aggressive price cuts squeezed profit margins. Profit excluding some items fell to 85 cents a share, slightly below the 86-cent average of estimates compiled by Bloomberg. The Austin, Texas-based electric-vehicle maker has been slashing prices in an effort to stay ahead of rivals. The company’s stock slid more than 4.5% on the news.

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Aspects of New Road Traffic Act That Will Require Phased Implementation Outlined

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Aspects of the new Road Traffic Act that require phased implementation are to be addressed as the country begins to operate under the new legislative regime, says Minister of Transport and Mining, Hon. Audley Shaw.

Delivering a Statement in the House of Representatives on January 31, Mr. Shaw noted that the transition to the new Act will require a period of conversion, with changes to the documents used and produced, and the required adjustments in road infrastructure.

Some of the transition matters include the mapping of existing driver’s licences to the new classes.

The Minister said that although the requirements to obtain a ‘Class C’ (commercial) licence will be different from the current requirements for a general licence, existing licences will be treated as though a motorcycle licence is ‘Class A’, private is ‘Class B’, and general is ‘Class C’.

“A person’s existing licence will continue to be valid to drive the types of vehicles recorded on the back of the licence, and a licence renewed during the transition period may not reflect any significant change in what is printed on the licence,” Mr. Shaw said.

Another transition matter is the allowance for current learner drivers to test under the old regime.

Mr. Shaw said new holders of provisional licences will not be able to apply for a driver’s licence for a period of six months.

“There will be an exemption to the six-month requirement before being tested for a driver’s licence for those who got provisional licences under the Road Traffic Act 1938 after August 1, 2022,” he stated.

Also, traffic signs that have been erected over the years with designs that vary from those now incorporated in the Road Traffic Regulations, will continue to be valid and to have the effect as per the earlier regulations and be enforceable accordingly.

In addition, vehicles will continue to be classified in similar manner to the earlier legislation, except for a broadening of the definition of a motorcycle.

“Where the classification of a vehicle is impacted by this change, the change will take place at the next fitness certification. Efforts will be made to contact owners of such vehicles, so that they can be made aware and understand any implications,” Mr. Shaw said.

Time will also be given for driving instructors to meet certification requirements.

Mr. Shaw explained that driving instructors and driving schools will have to be certified and licensed by the Island Traffic Authority.

“The effective date of this requirement is proposed to be January 1, 2024, which will allow for a reasonable time to allow the instructors to undergo an approved training programme,” he stated.

In addition, a national vehicle register is to be developed that will include all vehicles, whether operated on public roads or not.

However, vehicles used off-road will not need to be registered unless the owner wishes to get a title.

“It will take time to gather information on these vehicles to fully populate the register, but information will now be put in the register upon importation,” Mr. Shaw said.

Meanwhile, the Minister informed that the Island Traffic Authority (ITA), established under the Act, is a statutory body that is not yet operational as an organisation.

As a result, the functions to be carried out are delegated to the bodies that currently have responsibility, such as the National Works Agency, Tax Administration Jamaica, and the Ministry, and when the entity is set up, it will take over the requisite functions.

Mr. Shaw also informed that it would take approximately six months before the changed process for applying, issuing, and keeping records of demonstration plates can take full effect, as dealers will need time to adjust their processes so that the new registers and reporting systems can be populated and brought up to date.

On another matter, Mr. Shaw said speed limit zones have been revised and new zones identified, but it will take some time to get the new signs in place to demarcate the zones, so that the changes are clearly communicated to motorists and enforcement officers.

“It is anticipated that the new signs will all be in place by the beginning of next year,” he stated.

Persons with outstanding tickets will also be denied services, such as renewal of their driver’s licence.

Implementation of this measure will not come into effect immediately but should become effective by April 1, 2023.

Regarding the use of application forms, where the differences between the existing forms and the new forms are not significant, the TAJ and ITA will continue to use the existing physical stock until these are depleted, as the old forms are valid for use under the new legislation, in keeping with the Interpretation Act.

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