Accelerating Store Openings Primarily in the ASEAN Region
The Company Group has positioned overseas business as a key contributor to earnings over the medium-to-long term and is proceeding to build a foundation for this business resting mainly on the ASEAN region, which continues to grow economically. Under our Medium-Term Business Plan, we opened a total of eight new stores in Thailand, Malaysia and Indonesia over the two fiscal years ending March 2015 and March 2016, and as of March 31, 2016 had a total of 33 stores in six countries. During the most recently ended fiscal year, we restructured our business in existing areas of operation, added staff, and, in Malaysia, established a local subsidiary. These and other such steps allowed us to achieve profitability in our overseas business as a whole.
Plans for the future include additional store openings, primarily in the ASEAN region, and consideration of collaborations with local partners and M&A, with speed a key consideration in both cases. In addition to the current automotive goods retail business, we will also seek to enhance investment gains by, for example, entering into wholesale and brand licensing agreements and providing store development assistance to build a business that is adapted to regional characteristics.
AUTOBACS SEVEN Group Endeavors Abroad
Retail Business Development
| Number of stores |
11 (Subsidiary: 9 Franchise: 2) |
|---|---|
| First store opened in |
2001 |
| Operating company |
AUTOBACS FRANCE S.A.S. |
| Ownership percentage |
AUTOBACS SEVEN: 100% |
| Operating income |
¥9 million (FY ended March 2016) |
Current Status and Future Direction
Store openings are underway through a joint venture with a local company. At present, the subsidiary has established area dominance with large stores located outside the ring road encircling Paris. In the fiscal year ended March 2016, profitability at the operating income level was achieved with an improvement in the gross margin and greater inventory turnover. Attention will continue to focus on strengthening profitability at existing stores.
| Number of stores |
6 (Franchise: 6) |
|---|---|
| First store opened in |
1991 |
| Operating company |
Franchisee |
| Ownership percentage |
— |
Current Status and Future Direction
In Taiwan, AUTOBACS stores are operated by a Japan-based franchisee and are similar to AUTOBACS stores in Japan. The Company will continue to supply merchandise and provide store management support from Japan, as it uses existing stores to develop its business.
| Number of stores |
6 (Subsidiary: 6) |
|---|---|
| First store opened in |
2000 |
| Operating company |
SIAM AUTOBACS Co., Ltd. |
| Ownership percentage |
AUTOBACS SEVEN: 49.87% |
| Operating loss |
¥70 million (FY ended March 2016) |
Current Status and Future Direction
Small stores are being opened in small shopping areas adjacent to new residential developments and shopping malls, mainly in the capital of Bangkok, to boost brand awareness. Objectives going forward include adding to the total number of stores, expanding shares of local markets, and increasing profitability.
| Number of stores |
3 (Subsidiary: 3) |
|---|---|
| First store opened in |
1995 |
| Operating company |
AUTOBACS VENTURE SINGAPORE PTE, LTD. |
| Ownership percentage |
AUTOBACS SEVEN: 93.75% |
| Operating income |
¥135 million (FY ended March 2016) |
Current Status and Future Direction
In Singapore, where car ownership is expensive, AUTOBACS stores similar to those in Japan are being opened to target the upper-middle-income socioeconomic class. Despite the decline for the fiscal year ended March 2016, profitability is relatively stable. One or two more store openings are expected for this market.
| Number of stores |
5 (Subsidiary: 3 Franchise: 2) |
|---|---|
| First store opened in |
2012* |
| Operating company |
AUTOBACS MALAYSIA SDN. BHD. |
| Ownership percentage |
AUTOBACS SEVEN: 100% |
| Operating loss |
¥47 million (FY ended March 2016) |
* Opened by a Japan-based franchisee.
Current Status and Future Direction
Store development in Malaysia is being pursued through a subsidiary and a Japan-based franchisee. During the fiscal year ended March 2016, three small stores, offering mainly maintenance goods and services were opened by the subsidiary. Plans call for the opening of approximately10 stores mainly in Johor, one of the most developed states of Malaysia, by the end of fiscal year ending March 2018.
| Number of stores |
2 (Sublicensed stores: 2) |
|---|---|
| First store opened in |
2015 |
| Operating company |
PT. AUTOBACS INDOMOBIL INDONESIA |
| Ownership percentage |
AUTOBACS SEVEN: 49.00% |
Current Status and Future Direction
The joint venture company formed with INDOMOBIL Group* opened two stores under a sublicense agreement with a local company in the fiscal year ended March 2016. The stores are characterized by their small size and upscale atmosphere. Different from AUTOBACS stores in Japan, the stores will target the upper-middle-income socioeconomic class. Efforts will be made to open several more stores in the future.
* A prominent local automotive-related company group with which the Company entered into a business collaboration in August 2013.
Non-Retail Business Development
Current Status and Future Direction
In China, where operations were originally established in 2004, all stores were closed by the end of the fiscal year ended March 2015 to overhaul the retail business. The automotive goods trading business, however, has continued to operate and achieved profitability, recording operating income of ¥4 million for the fiscal year ended March 2016. For the time being, efforts to develop the trading business will continue as consideration is given to developing a collaboration partner for future retail store openings.
Current Status and Future Direction
In January 2016, AUTOBACS entered into a capital and business collaboration with the Motech Group, a local provider of automobile maintenance services. Under Philippine law, it is not possible for the Company Group itself to open stores. The direction going forward, therefore, is to license the AUTOBACS brand, wholesale certain merchandise, and provide chain management support to the Motech Group as it develops business in the Philippines.