Jetcon pushes ‘drive away free’ promo to jumpstart post-COVID recovery
Pre-owned car dealer Jetcon hopes to reduce the number of cars on its lot in Kingston with a ‘drive away free’ promotion that ends this month.
The company, which is the sole motor vehicle dealership listed on the Jamaica Stock Exchange, had its final quarter of the 2019 financial year interrupted by the deadly COVID-19 pandemic and is now undertaking strategies to begin its recovery.
The pandemic resulted in the company adjusting prices to fit market trends as well as move some slow-moving stock of vehicles.
By the end of 2019, Jetcon had cleared most of the cars but was left with an 11.75 per cent decline in revenue to $1.025 billion and a 34 per cent dip in net profit to $60.3 million when compared to the 2018 financial year. Inventory of the company, however, grew two per cent to $445 billion year over year.
Jetcon started its 2020 financial year with lower sales and profit compared to the similar period in 2019, but car sales of the company took a further nose dive over the period April to May when a large segment of the business sector was closed.
Its profit for the three months ended March 2020 slipped by 47 per cent, down from $15.2 million in the comparative quarter of 2019.
Revenues slipped by seven per cent to $227 million, down from $246 million in the first quarter of 2019.
Directors stated that sales took a sharp dive in March when the first case of COVID-19 was announced in Jamaica, and sales to date have fallen by 85 to 90 per cent.
To counter this, Jetcon said it took measures to cut expenses, including reduced operating hours and temporarily furloughing staff.
In notes attached to the quarter’s results, directors said, “Thankfully, we are beginning to see light at the end of the tunnel, with the number of new cases drastically reducing, and curfews beginning to ease, we anticipate beginning the journey to normalcy by the end of the June quarter.
“To that end, we are seeing more customers visiting our showroom since the recent easing of travel curtailment, in addition, we are currently formulating strategies to foster increased business.”
“Since the government lifted restrictions, we have seen some rebounding in bookings and sales. We are of the view that the year will remain a challenge but management is exercising various strategies to maintain sales at an acceptable level while keeping controls over cost,” the company said in its recently released 2019 annual report.
The ‘drive away free’ promotion is the first strategy being pushed by the company post-COVID-19.
The promotion allows customers to drive a Jetson vehicle for 90-days without the need for a deposit, commitment fees or payment along with one-year valuation on vehicles at no cost to the customer. It only requires that customers be approved for financing by the banking institutions by June 30.
While a general mood of optimism in future outlook remains in the company, Jetcon highlighted that the 2020 financial year might see the company at risk of rising interest rates, if demand for loans rises sharply, thus making borrowing cost greater for the financing of vehicles.
Additionally, the company noted that the coronavirus pandemic may affect its supply of vehicles from Japan, as new-car factories shut down due to the spread of the disease.