Intensifying competition and ease of entry in the used-vehicle export market

「Chinese manufacturers are gaining prominence amid concerns over higher energy prices, and the Australian automotive market is showing signs of intensifying competition.」

「The entry of Chinese brands selling relatively affordable environmentally friendly vehicles was also notable, making this a year in which dealers faced an increasingly challenging competitive environment due to intensifying price competition and other factors.」

「Competition has intensified due to increased inventories as global automakers normalize production, as well as the entry of Chinese vehicles into the market, putting pressure on dealer earnings.」

「The new-vehicle dealer and automotive logistics company in Australia that became members of the Group during the period from last year to this year are both major companies in their respective industries, but they are constantly exposed to intense competition within those industries. It is therefore possible that they may fail to make the expected contribution to earnings or generate synergies with the existing businesses.」

「The Group is further refining its distinctive business model of consistently providing a range of services through Group companies or partner companies, from procuring used vehicles through export-related refurbishment, decontamination, inspection and quarantine, non-vessel-operating services for ocean transport, domestic vehicle inspections in destination countries, auto loans, maintenance and other after-sales services, thereby improving customer convenience and strengthening cost competitiveness to maintain and expand its advantage over competitors.」

「Accordingly, the Group is working to maintain and strengthen its competitive advantage by further strengthening its relationships with high-quality dealer customers, which it has steadily built over the years, while differentiating its service offerings.」

「Across the used-vehicle export market, competition with other industry participants has intensified as the market has expanded. The Group’s business is not protected by patents, trademarks or other intellectual property rights, and entry is relatively easy for anyone who obtains a license under the Secondhand Goods Business Act, which is comparatively easy to obtain.」