Extending the value chain and expanding automotive-related services

「In the service segment, Auto Trader Media Group Ltd, which became a consolidated subsidiary at the end of the third quarter of the previous fiscal year, contributed to year-on-year revenue growth. The company also made upfront investments to strengthen advertising and promotional activities to further raise market awareness.」

「Making Auto Trader, which provides online advertising services, a subsidiary is expected to generate strong synergies with existing businesses, including support for sales promotion by dealers that are customers of the Group. The company also expects it to contribute as a new business platform for the Group, including businesses serving end users, and will promote further strengthening and extension of the value chain in New Zealand.」

「As growth areas for the Group's businesses, primarily in the service segment, the Group aims to maintain the auto loan business and other businesses at an appropriate scale and improve earnings power, while advancing its EV-related business, maintenance services for automotive consumables, and other businesses. It also plans to expand the value chain by strengthening partnerships with leading dealers.」

「In the service segment, although the number of vehicles sold by Trade Cars Limited, a subsidiary engaged in the wholesale of used vehicles, declined as described above, revenue increased due in part to higher selling prices. Revenue was ¥8,446 million, up 15.2% year on year, while segment profit was ¥281 million, down 24.5%.」

「As growth areas for the Group's businesses, primarily in the service segment, the Group aims to maintain the auto loan business and other businesses at an appropriate scale and improve earnings power, while advancing its EV-related business, maintenance services for automotive consumables, and other businesses. It also plans to expand the value chain by strengthening partnerships with leading dealers.」

「In Services, higher sales volumes and selling prices at Trade Cars Limited, the used-car wholesale subsidiary, resulted in net sales of ¥7,333 million, up 81.1% year on year, and segment profit of ¥373 million, up 52.7%.」

「In Services, the recovery in sales volumes and increase in selling prices at Trade Cars Limited, the used-car wholesale subsidiary, resulted in net sales of ¥4,822 million, up 105.0% year on year, and segment profit of ¥248 million, up 36.8%.」

「In addition to maintaining the auto loan business and other businesses at an appropriate scale and improving earnings power, the company will advance its EV-related business, maintenance services for automotive consumables, and other businesses.」

「Following the resolution by the board of directors to liquidate the consolidated subsidiary concerned, the full unamortized goodwill balance of ¥123.786 million arising from the acquisition of the business through consolidated subsidiary Universal Rental Cars Limited was recognized as an impairment loss under extraordinary losses for the nine-month period ended the third quarter of the current fiscal year.」

「This was mainly attributable to the reduction to zero, through the recognition of an impairment loss, of the entire ¥128 million goodwill balance arising from the acquisition of the business through the consolidated subsidiary Universal Rental Cars Limited, a rental car company, following the Board of Directors’ resolution to liquidate that subsidiary, partly offset by increases resulting from the foreign currency translation effect on property, plant and equipment held by overseas subsidiaries.」

「As noted above, revenue increased on the solid performance of the personal auto loan business and the acquisition of the rental car business, but the substantial decline in sales through “SmartBuy” resulted in revenue of ¥418 million, down 2.8% year on year.」

「The personal auto loan business remained solid, and Universal Rental Car Limited completed the acquisition of a car rental business and is proceeding with its integration.」

「Through this acquisition, we believe that the Group can take over USAVE's customer base, which is focused on domestic demand in New Zealand, expand revenue and business scale by combining it with UR's ability to serve tourism demand, and achieve more efficient operations and strengthen earnings through measures such as integrating overlapping locations.」

「(Services) As described above, sales of “SmartBuy” vehicles and the consumer automotive loan business performed steadily, among other factors, resulting in revenue of ¥4,302 million, up 21.5% year on year. However, segment profit fell 54.5% year on year to ¥40 million due mainly to the disposal of inventory held by MD Distributors Limited, which exited the business in September 2018, and higher personnel expenses from hiring associated with the expansion of operations.」

「Sales of “SmartBuy” vehicles and the consumer automotive loan business performed steadily, among other factors, resulting in revenue of ¥3,051 million, up 40.0% year on year. However, segment profit fell 35.4% year on year to ¥29 million due mainly to higher personnel expenses from hiring associated with the expansion of operations.」

「Sales of “SmartBuy” vehicles and the steady performance of the consumer automotive loan business resulted in revenue of ¥1,761 million and segment profit of ¥23 million.」

「In addition to expanding the automotive loan and rental-car businesses and improving their profitability, the company will advance businesses related to EVs and maintenance services for automotive consumables. It will also build a foothold in consumer-facing businesses such as insurance and warranties by strengthening partnerships with leading dealers.」