JAC reported in mid-2021 that it was facing increases of up to 400% in maritime freight to move vehicle kits and spare parts from China.
Isidoro Massri, general director of JAC Mexico, said in an interview that they never saw the price increase as “something permanent” and that they were always looking for a way to reverse the situation. The manager assures that the brand will maintain its profit margins, but that his main focus now is “doing the right thing for his customers.”
This decision by JAC could put pressure on other brands in the Mexican market at a time when competition has intensified with the arrival of new Chinese competitors in the Mexican automotive market.
JAC ensures that the price reduction is not a temporary promotion, but a permanent measure to offer customers “fair” and “accessible” prices. Massri explained that there are models that dropped between 23,000 and up to 97,000 pesos, in the case of some commercial vehicles.
The Chinese brand has stood out in the Mexican market for offering competitive prices in its range of vehicles. The E10X electric model has been a clear example of this, since until now it remains the most affordable in its segment, with a price of 439,000 pesos, which represents a reduction of 10,000 pesos compared to the price it had in 2022.
The most basic version of the Frison pickup, which is one of the best-selling models of the Chinese brand, went from 440,500 to 435,000; while the Sei 4 Pro SUV went from 375,000 to 353,000 pesos.
What will happen to the residual value of the JAC models that were sold before the price drop?
Given the possibility that the initiative to lower car prices could have an impact on the residual value of models sold with a higher invoice value, Massri acknowledged that some customers may be disappointed. But, in general, he assures that the initiative to lower prices seeks to benefit the majority of buyers.
“We believe that 99% of users deserve this,” Massri said. “There is no way to do it in which everyone is happy,” added the director of JAC Mexico in relation to the initiative to lower the prices of the brand’s models in Mexico.
The executive pointed out that, in the past, the commercial value against the invoice value was a determining factor in establishing the resale value of a model, but today there are so many variables that influence the pre-owned market, such as supply and price. demand, that it is difficult to predict exactly how the residual value of a particular vehicle will evolve.
“We believe that in the coming months, market supply and demand will continue to be the most important factors in determining a vehicle’s residual value,” Massri said.
How much do JAC models cost in Mexico?
The company sells 19 models in the Mexican market, each with two or three versions and even with electric variants. These are the base prices (entry versions) of JAC’s best-selling vehicles in Mexico: