Up until the year ended March 31, 2010, we focused on liquidating unprofitable businesses, streamlining costs, and reinforcing our governance structure, but the market climate for the domestic franchise chain business was adverse. We responded by launching the AUTOBACS 2010 Medium-Term Business Plan in the following fiscal year.

We positioned the first two years of that initiative as an expansion preparation period. During that time, we prioritized reinforcing the cost-competitiveness of stores and headquarters so we could offer prices that satisfy customers under an adverse operating climate. We also lowered costs through purchasing reforms and remodeled our sales floors and strengthened operations to make products easier to select and buy and enhance customer enjoyment.

During the latter two years of our plan, we are concentrating on expanding existing businesses based upon our achievements so far. We are expanding the number of stores so customers sense that our stores are closer to them, enabling us to expand market shares in each area. Our objectives are to increase earnings and corporate value.

We aim to achieve our corporate slogan of "Anything about Cars, You Find at AUTOBACS" by focusing on Measures to Boost Store Profitability and Measures to Increase Market Share.

Basic Policies of the AUTOBACS 2010 Medium-Term Business Plan

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  Consolidated operating income	160 million yen
  ROE (Return on equity)	7.0%
  DOE (Dividend on equity)	3.0%

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  Focus on fundamentally strengthening the domestic franchise chain business to increase market share and store profitability
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  Strive to further increase shareholder value through proactive business investment and enhancement of shareholder returns

>> AUTOBACS SEVEN's growth trajectory

We are reforming sales spaces based on the concept of a customer-oriented perspective on environments that make products and services easier to select and purchase and which are enjoyable to shop in. We are also reforming human resources and operations to reinforce service so customers feel good when they make purchases.

(1) Store reforms

During the first two years of the AUTOBACS 2010 Medium-Term Business Plan, we focused on renovating all AUTOBACS stores to make it easier for customers to select and purchase products. As a result of these enhancements sales of accessories and car maintenance items are starting to show improvement.

We have extended these reforms to Super AUTOBACS stores, renovating 19 stores in the year ended March 31, 2013. We have made these outlets more fun and exciting by providing highly appealing merchandise lineups and sales floors that are unique to Super AUTOBACS. We will continue reforming stores to attain greater customer support.

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  Vehicle advice counter

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  Sports seat sales area

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  Car model specific merchandize area

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  Pit-Stop Menu Proposal Counter

(2) Gross margin improvement (purchasing reform)

Our basic stance on gross margin improvement is to provide customers with valuable products at reasonable prices.

Since launching the AUTOBACS 2010 Medium-Term Business Plan, we have streamlined merchandise lineups and purchased in bulk while reinforcing internal discounting management to bolster the gross margins on numerous product lines.

We will continue to promote strategic initiatives together with suppliers and institute reforms that build win-win relationships by enabling us to offer products to customers at affordable prices while benefiting suppliers.

(3) Human resource and operation reforms

We are striving to improve our market share by aggressively opening new stores while developing new service formats and our multichannel strategy.

(1) Opening new stores

We are opening new stores to improve customer convenience and attract more customers. Other sites for store openings include areas lacking automotive goods outlets and small commercial areas in suburbs where we have not opened stores before.

We inaugurated the AUTOBACS Tire Shop as a format smaller than regular AUTOBACS stores for focusing on sales and service for tires and wheels. Stores in this format also offer regular maintenance and replacements for such items as oil and batteries.

We reviewed individual store fixtures and pit equipment as part of initiatives to further lower costs. We aim to materialize our slogan of "Anything about Cars, You Find at AUTOBACS" by supplying products and services that match local needs.

>> A Closer Presence to Customers

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  AUTOBACS NARA DAIANJI Store in Nara

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  AUTOBACS SHIMA UGATA, Store in Mie

(2) Develop service formats

We have deployed new service formats since the year ended March 31, 2012, opening three Auto Body Repair and Painting Centers (in Urayasu, Chiba Prefecture, Toda, Saitama Prefecture, and Fukuoka, Fukuoka Prefecture). We set up the Statutory Safety Inspection Contact Center to handle customer inquiries and offer consultations about statutory safety inspections, taking reservations for inspections and following up to ensure that customers deliver the vehicles to stores on the agreed dates.

We are engaging in property development for full-service format stores that enhance customer convenience, and are reflecting on what we have learned from pilot stores in efforts to establish new formats.

>> Extensive Product Lineups and Services

(3) Develop multichannel sales strategy

We expect sales of automotive products and services to expand through the Internet. The AUTOBACS GROUP has positioned e-commerce as a pillar for supporting growth, and has accordingly enhanced its online store and reinforced its capabilities.

In August 2012, in addition to our AUTOBACS.COM Internet shopping site we opened the AUTOBACS Rakuten Ichiba Store in an Internet shopping mall operated by Rakuten, Inc. In June 2013, we opened an online store on Amazon too. We opened the AUTOBACS store as an official online store on Amazon's Japanese site. As well as offering bargain-priced items one would expect from online shopping, the site supplies essential car maintenance information to increase convenience for people who know little about cars, as part of efforts to propose the best products to our customers.

An increasing number of customers ordering online who have never been to bricks-and-mortar AUTOBACS stores before are now visiting for installations after ordering parts from our online store. We will therefore reinforce Internet sales as a means of attracting new customers.

>> A Closer Presence to Customers

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  http://www.autobacs.com/index.html

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  http://www.rakuten.ne.jp/gold/autobacs/

Overseas, we have AUTOBACS stores in France, China, Singapore, Thailand, Taiwan, and Malaysia (the Taiwanese and Malaysian outlets are managed by franchisees). One objective of the AUTOBACS 2010 Medium-Term Business Plan is to make overseas operations profitable, and we achieved this in the year ended March 31, 2012. In the year under review, however, our operations in China made slight losses because of increased store-opening costs and other factors.

This fiscal year, we will continue striving to make our overseas business profitable, as we look to expand operations in the ASEAN region.

Areas Operated by Subsidiaries (Including Some Franchise Outlets)

(1) France

We opened our first store in France in January 2001. Having since acquired other locations, we now have 11 stores in France (including two franchise outlets). In the year ended March 31, 2013, we focused on sales of automotive essentials and consumables, centered on tires, against a backdrop of a stagnant European economy and dwindling personal consumption. These efforts enabled us to garner support from local customers. We aim to generate ongoing earnings by endeavoring to reduce selling, general and administrative expenses.

(2) China

We opened our first store in China in 2004. The Chinese automotive goods and services market offers considerable growth potential, and we have been using direct operations stores for testing and verifying store model initiatives. Today, we have two stores in China, directly managed by local subsidiaries. As well as offering automotive goods and services, the stores have car-washing facilities, and are exploring local customer needs.

(3) Singapore

We opened our first store in 1995, and now operate three outlets in Singapore. We have gained solid support from local customers for our extensive merchandise lineups and quality services. Our stores in Singapore have expanded sales on the strength of demand for tires, oil, batteries, and other consumable items and continue to generate operating income. 

(4) Thailand

We operate four stores in Thailand, the first of which opened in January 2000. Despite the effect of the floods in 2011, sales at all of these stores have remained healthy, reflecting efforts to reduce expenses and undertake promotional activities.

Areas Operated by Franchisee Companies

(1) Taiwan

We opened our first local store in January 1991, and now have six outlets. The AUTOBACS ZHONGHE Store, which opened in October 2012, offers around 4,500 items, ranging from consumable items to car washing goods, car interior goods, and luxury items. We will continue our initiatives to expand earnings at these stores going forward.

(2) Malaysia

In April 2012, we opened our first outlet in Malaysia, the AUTOBACS Klang Sentral Store. This store offers similar services to those of its counterparts in Japan, including an extensive merchandise lineup as well as oil and tire changes and car inspection services.