Auto trader Jetcon diversifies into solar

Used car dealer Jetcon Corporation has added a new business line, which takes it outside the auto market for the first time in three decades of operation, amid moves to restore sales revenue to prepandemic levels.

The car company has ventured into the distribution of solar photovoltaic or solar PV systems, a move that Managing Director Andrew Jackson described as a natural outcome of their involvement in the trade of electrical vehicles or EVs.

Jetcon entered the new line of business in August, he told the Financial Gleaner.

“Simply put, it goes hand in hand with the provision of electric cars. The solution to Jamaica’s energy security problem is solar and electric cars. We’re talking free power going into powering your house and the rest going into your car,” Jackson argued.

He added that Jetcon found a ready market for the solar panels and inverters it supplies and was seeking to deepen its energy operation through the provision of lithium batteries, the preferred means of storing excess energy produced by solar PV systems.

Jackson said that although the company is at the exploratory stage for the batteries, Jetcon would definitely move in that direction since the batteries have multiple uses.

For the solar operation, the panels are sourced from Chinese manufacturer Gamko. The inverters which are necessary to convert the direct current, DC, electricity to usable alternating current, AC, are another important component in solar PV systems. Jackson said those items are being brought in on a smaller scale, but the effort will be expanded when a suitable supplier is identified.

Jetcon has company has no preferential target market for the energy solutions.

“We’re supplying all over, companies, residential, but we really prefer dealing with installers rather than individuals buying one or two panels,” Jackson said.

Since 2021, Jackson has been touting the value going electric. Aside from the EVs it distributes, a half or five of the company’s own fleet of 10 service vehicles are Nissan Leaf EVs. Jetcon has also installed two Level 2 or mid-level EV chargers that take power from the company’s 20kW grid-tied solar PV system. The excess power is sold to electricity distributor Jamaica Public Service Company under a net-billing arrangement, Jackson said.

He declined to comment on the number of EVs sold by Jetcon over the past year, but said that while the market adoption of EVs is slow he feels encouraged. He is also calling for more concessions on EV imports to stoke the market.

The recently introduced EV importation regime, which allows for concessionary duty of 10 per cent, on cars that are three years old or less, needs to be revisited, he said, while noting that it hampers demand and the shift towards EV adoption.

Comparatively, he added, the age limit for the importation of internal combustion engine or ICE vehicles is six years. The normal duties are then applied for older ICE vehicles, he said.

Jackson explained that about 80 per cent of all imported used cars cost less than $3 million, but that none of the EVs available that qualify for the incentive cost less than $4 million.

“That tells you that there is not going to be any serious adoption of EVs in Jamaica under the current incentive programme. For me this is a non-starter. Government needs to review this regime because it is too restrictive,” he commented during the company’s annual general meeting on Wednesday.

Despite this, he said, Jetcon still had an affinity for EVs, given their low maintenance cost and reliability.

Jetcon trades in pre-owned full EVs, hybrids and plug-in hybrids. The Toyota Aqua, Nissan Note Hybrid and the Honda Fit Hybrid have been big sellers, Jackson said.

The movement of EVs and hybrids helped Jetcon return to profit in 2021, after a loss of $6.73 million in 2020. It was the company’s first bleed in eight years and came in the advent year of the coronavirus pandemic when commute had trickled down dramatically.

At year ending December 2021, Jetcon posted after-tax profit of $15.42 million, and is poised for an even better outcome in 2022, with earnings at half-year ending June already topping $14 million.

As for its sales performance, Jetcon turned over $1.02 billion in 2019, but in the first year of the pandemic annual sales sank to $629 million.

Revenue recovered partially to $870 million in 2021, but now appears set to return to prepandemic levels based on the $506 million of business done at half-year, within the January-June period.

Regarding the prospective size of the energy operation, Jackson said he was not in a position to give definitive projections, but noting that it was “looking very promising at this point”.

Jetcon is looking to invest about US$2 million in the operation over time once its revenue recovers, the MD said. He added that while the new business line was being conducted through Jetcon, the company might end up setting up a subsidiary for the operation.

neville.graham@gleanerjm.com