Although the new energy vehicle manufacturing force is sweeping the globe today, and even Chinese automakers are almost overshadowed by rising forces like BYD and NIO, XPeng, and Li Auto, no one can ignore the past glory of those established automakers. For example, JAC was a well-known brand at the peak of the fuel vehicle era. Unfortunately, JAC, which deployed pure electric vehicles early on, failed to replicate its highlights from the fuel vehicle era. Its presence has been extremely low in recent years, and it even degenerated into the "Foxconn" of the automotive industry, relying solely on contract manufacturing for NIO to generate traffic and prove that this established automaker is still alive in the turbulent waves of the times and has not been washed away by the younger generation.

The mystery behind the sudden surge in net profit

At the end of October, JAC Motors once again became a hot topic in the automotive industry due to its financial report. In the third quarter of this year, it achieved revenue of 10.908 billion yuan, a year-on-year decrease of 5.57%; however, its net profit attributable to shareholders was as high as 324 million yuan, an increase of 1028.38%. The net profit surged 10 times year-on-year, setting a record for the highest single-quarter profit since 2017. Upon the release of the financial report, the stock price also rose by 7.48%, and the total market value closed at 81.311 billion yuan.

Of course, the sudden surge in the third-quarter financial report was not a windfall or a stroke of luck, but rather the immediate effect of JAC's business transformation. In the first three quarters of this year, total revenue was 32.206 billion yuan, a year-on-year decrease of 5.06%; net profit attributable to shareholders was 625 million yuan, a year-on-year increase of 239.86%. Among them, the net profit attributable to shareholders after deducting non-recurring gains and losses in the third quarter was still in the red by 323 million yuan, and the first three quarters recorded a loss of 232 million yuan after deducting non-recurring gains and losses.

Judging solely from the third-quarter financial report, JAC undoubtedly has a trend of suddenly becoming popular and turning losses into profits. However, combining the performance of the first two quarters, it seems far-fetched or deviated from the facts to say that JAC is about to take off and embark on the broad road to regaining its glory. Looking at production and sales from January to September, both volume production and sales volume decreased by 26.04% and 1.48%, respectively. The main business was not ideal, and it could only be saved by "contract manufacturing." For an established automaker, this may be too frustrating, but in the current wave of new energy vehicles, traditional automakers can barely survive unless they make drastic changes.

JAC's net profit surged 10 times directly in the third quarter, which is naturally a good sign. Regardless of where the profit comes from, making money is at least better than consistent losses. As JAC enters its 60th anniversary, it missed the golden period of transitioning from trucks to new energy vehicles. Instead, there was a glimmer of hope in "contract manufacturing." It first gained a breather by manufacturing for NIO and recently regained popularity by partnering with Huawei to produce the "domestic Maybach" - Zunjie. Whether JAC can become the next Thalys has become a topic of common concern in the automotive industry.

Today's JAC is no longer the real "JAC"

Established in 1964, JAC manually produced Anhui's first 2.5-ton truck in 1968 and produced the first batch of 20 cars, officially named "JAC," in 1969. JAC was once on the brink of collapse and almost acquired by foreign capital before mass-producing the first generation of light trucks. Then, in 1990, it successfully manufactured China's first bus-specific chassis, rewriting the history of Chinese bus chassis modified from truck chassis and gradually getting on the right track. It produced the first generation of light trucks and entered the stock market in 2001, ushering in the "golden decade" of Chinese automobiles.

It is worth mentioning that in 2002, when China did not even have the concept of electric vehicles, JAC initiated the research and development of new energy vehicles and successively developed the country's earliest pure electric minibus. In 2009, it clearly proposed to take pure electric as a new research direction for automobiles. Then, in 2010, it launched the first batch of 585 pure electric sedans, pioneering the pure electric vehicle industry.

Thus, a surprising scene emerged: JAC, which was the first to deploy and invest in pure electric vehicles, why did it fall behind after several years and was eventually surpassed by the rising new forces, becoming an abandoned child of the times? This is probably a bizarre deal that is still incomprehensible to this day. Clearly cooperating with the up-and-coming NIO in the form of contract manufacturing, how did it end up without itself, and even the name "JAC" was weakened?

This may be inextricably linked to the strategic thinking of the senior management. From the emergence of the new brand SOL, to Volkswagen taking over with a 75% stake, the once-glorious JAC officially became a thing of the past, transforming into a subsidiary of Volkswagen.

Can JAC relaunch with Zunjie after being weakened?

Clearly the first initiator and producer of pure electric vehicles, JAC has degraded to contract manufacturing for NIO. Even if it relies on contract manufacturing, it parted ways with NIO after cooperation and was gradually eroded by Volkswagen, becoming an established automaker that has completely lost its aura. JAC's operations in recent years have been bewildering, and it is unclear what the logic behind them is.

This may be related to a notice from the Ministry of Industry and Information Technology in 2022, forcing JAC, which was already burdened with heavy debt, to sell assets through public listing to survive. NIO, with independent production qualifications, started anew and completely abandoned JAC, its former partner. In contrast, JAC, with its superb technology, has built considerable brand value for NIO but ended up making clothes for others, relying on "self-sacrifice" to survive.

Fortunately, when the east does not shine, the west does. After "breaking up" with NIO, JAC quickly found Huawei and reached an intelligent new energy cooperation agreement with it, focusing on creating a luxury intelligent connected electric vehicle - Zunjie! This is also a high-end automotive brand jointly created by Huawei and JAC, directly competing with ultra-luxury brands such as Maybach and Rolls-Royce, positioning itself in the high-end market worth millions.

With Thalys's emergence as a dark horse, its market value is approaching that of BYD, and Huawei and JAC have joined forces, combining traffic and technology. However, challenges and opportunities coexist, and it remains to be seen whether JAC, after experiencing a painful period, can revitalize its fortunes.