Legal and Regulatory, Political and Economic, and Foreign Exchange Risks Associated with Expansion in Southeast Asia
First written in FY2016. 5 of 17 entries say "Worsened", first in FY2020. Latest entry: FY2026.
The whole theme swung hardest in 2025: 72 of 118 companies on the "Worse" side.
- FY2026RaisedAnnual report
「The Group operates in 5 countries—Vietnam, Indonesia, the Philippines, Cambodia and Malaysia—and plans to newly enter Singapore.」
The overseas expansion plan calls for increasing the number of countries from 5 to 6, including Singapore, thereby broadening the scope of country risks. - FY2025RaisedAnnual report
「The Group operates in 4 countries—Vietnam, Indonesia, the Philippines and Cambodia—and has newly entered Malaysia.」
The scope of operations in Southeast Asia expanded from 4 countries to 5, including Malaysia. - FY2025-H1WorsenedAnnual report
「In the overseas business, transaction volume declined because weakness in Vietnam and Indonesia, where the operating environment was challenging, outweighed increases in Cambodia and the Philippines.」
Although the Group operates in 4 Southeast Asian countries, increases in Cambodia and the Philippines were insufficient to offset the decline in overseas transaction volume caused by the challenging operating environment and weakness in Vietnam and Indonesia. - FY2024RestatedAnnual report
「The Group operates in 4 countries: Vietnam, Indonesia, the Philippines and Cambodia.」
The Group continues to recognize country risks related to political, economic and regulatory conditions in its 4 Southeast Asian markets. - FY2024-Q2RestatedAnnual report
「In the overseas business, the four-wheel and two-wheel vehicle markets in Vietnam remain sluggish, but transaction volume increased due to market recovery in Indonesia, Cambodia and the Philippines, the development of new affiliated merchants and expansion of sales areas.」
While market weakness continued in Vietnam, transaction volume continued to increase in Indonesia, Cambodia and the Philippines due to market recovery, the development of new affiliated merchants and expansion of sales areas. - FY2024-Q1Vietnamese market weakness alongside recovery in other countriesAnnual report
「In the overseas business, signs of weakness in economic activity have begun to emerge in Vietnam, including sluggish four-wheel and two-wheel vehicle markets. In Indonesia, Cambodia and the Philippines, however, the recovery from the COVID-19 pandemic led to stronger sales activities and increased transaction volume.」
Regarding market environment risks associated with overseas expansion, market weakness emerged in Vietnam, while conditions improved in Indonesia, Cambodia and the Philippines as their economies recovered. - FY2023-Q3MitigatedAnnual report
「In Vietnam, Indonesia, Cambodia and the Philippines, economic activity moved toward normalization under policies for living with COVID-19. As the impact of semiconductor shortages also gradually eased, the four-wheel and two-wheel vehicle markets recovered, and the companies worked diligently to implement various initiatives and develop their dealer networks.」
Regarding the market and regulatory environment associated with overseas expansion, economic activity normalized and markets recovered under “living with COVID” policies, leading to increases in transaction volume and operating revenue. - FY2022MitigatedAnnual report
「At subsidiaries in the countries where the Group operates, we are working to avoid and mitigate the above risks by collecting information and coordinating in a timely manner with relevant authorities, organizations and legal advisers. On the Company side, we are also working to share issues, identify risks and formulate measures by promptly gathering and understanding information on each country’s performance, markets, and political and economic trends at monthly meetings and other forums.」
For overseas business risks, the Company explicitly described local information gathering and coordination, as well as monitoring conditions in each country and formulating measures through monthly meetings. - FY2022-Q3RestatedAnnual report
「Meanwhile, overseas conditions remained challenging as the resurgence of COVID-19 led to further tightening of lockdowns and movement restrictions in various countries.」
In the overseas business, lockdowns and movement restrictions continued to be tightened as infections resurged, and market and regulatory risks associated with overseas expansion continued to be identified. - FY2022-Q1WorsenedAnnual report
「Overseas, the operating environment became challenging as infections surged even in Vietnam and Cambodia, where the number of cases had previously been relatively contained, in addition to Indonesia and the Philippines, which had been severely affected by the spread of COVID-19, resulting in restrictions such as limits on movement and requests to suspend business operations.」
The impact of the infection and related restrictions spread from Indonesia and the Philippines to Vietnam and Cambodia, creating a challenging operating environment in all 4 overseas countries. - FY2021WorsenedAnnual report
「In Indonesia and the Philippines, the businesses were significantly affected by COVID-19, and repeated tightening of restrictions on movement caused market conditions to deteriorate, resulting in declines in transaction volume and operating revenue.」
Market and regulatory risks associated with expansion in Southeast Asia materialized over the full year as declines in transaction volume and operating revenue in Indonesia and the Philippines. - FY2021-Q3WorsenedAnnual report
「Our Group has reached the final year of the 13th three-year medium-term management plan, RAISE 2020. To realize the medium-term management vision of becoming an advanced consumer finance company chosen by customers, with Japan and ASEAN as its primary markets, we are steadily advancing our management strategy under the priority policies of “Sustainable Growth of Domestic Businesses,” “Growth and Expansion of Overseas Businesses” and “Improved Productivity and Strengthening the Growth Platform.”」
In the overseas business, the number of infections remains high, particularly in Indonesia and the Philippines, and transaction volume has declined due to the impact of tighter restrictions. Market and regulatory risks associated with expansion in Southeast Asia continue to be reflected in performance. - FY2021-Q1MaterialisedAnnual report
「Although selling, general and administrative expenses declined in line with lower transaction volume and the curtailment of operating activities, consolidated operating expenses increased to ¥36,183 million, up 6.4% year on year, due to higher bad-debt-related expenses in Indonesia and higher financial expenses resulting from the sharp depreciation of the rupiah.」
The foreign exchange risk associated with expansion in Southeast Asia materialized in actual performance as a sharp depreciation of the Indonesian rupiah and an increase in financial expenses. - FY2020WorsenedAnnual report
「After completing the second year of the medium-term management plan “RAISE 2020,” the challenge of profit growth in the overseas business has become apparent. Growth has been slower than initially anticipated due to factors including tighter regulations in each country and the risk of fluctuations in market conditions.」
The Company stated that profit growth in the overseas business was slower than initially anticipated due to tighter regulations in each country and fluctuations in market conditions. - FY2019-Q3MaterialisedAnnual report
「Operating expenses increased due to higher bad-debt-related expenses accompanying the expansion of operating receivables, as well as higher finance costs and other expenses resulting from the depreciation of the Indonesian rupiah.」
Of the foreign exchange fluctuations previously identified as a risk, depreciation of the Indonesian rupiah has appeared in the actual performance commentary as an increase in financial expenses and other costs. - FY2018RaisedAnnual report
「The Group is expanding its business in overseas markets, mainly in Southeast Asia, with operations in Vietnam, Indonesia, the Philippines and Cambodia. Expansion into these overseas markets entails risks such as unexpected changes in laws or regulations differing from those in Japan, political and economic turmoil, and foreign exchange fluctuations. If such events occur, they could affect the Group’s performance.」
Cambodia was added to the countries covered by overseas business risks, expanding the scope of the Group’s overseas operations. - FY2016First statedAnnual report
「The Group is expanding its business in overseas markets, mainly in Southeast Asia, with operations in Vietnam, a consolidated subsidiary, and Indonesia, an equity-method affiliate. Expansion into these overseas markets entails risks such as unexpected changes in laws or regulations differing from those in Japan, political and economic turmoil, and foreign exchange fluctuations.」
The Group explicitly identified local institutional, political and economic, and foreign exchange risks alongside its policy of expanding overseas business.