“Realize Your Dreams”—This phrase was passed down as AUTOBACS SEVEN’s corporate motto by our founder, Toshio Sumino, and it remains a part of our DNA to this day. These words contain the belief that you can achieve the dreams and future that you envision in your heart if you aspire to them fervently, believe strongly in them, and act upon them.

AUTOBACS, the one-stop shop conceived by our founder where customers can purchase automotive goods and parts in one location, was born in November 1974 and celebrated its 50th anniversary in 2024. It grew significantly under the franchise system, which was still rare at the time, and achieved 100 stores in a mere five years against the backdrop of Japan’s growing motorization market.

We began developing and selling private- brand products in 1977 and made our overseas debut in 1986. Today, AUTOBACS has expanded to roughly 100 stores in Taiwan, Thailand, Singapore, France, Malaysia, and the Philippines, and we do business as a wholesaler of oil, audio, etc. in China and Australia.

In 2002, we began offering statutory safety inspection and maintenance services as well as purchasing and selling used cars as AUTOBACS CARS.

Today, we have established sales of automotive goods and services, statutory safety inspection and maintenance services, and used car purchasing and sales as the three business pillars at our stores, and the group as a whole has nearly 1,000 stores throughout Japan and the world.

On the other hand, when the first store was opened, we were supported by the increasing working population, the idea at the time that cars were equivalent to status, the popularity of car air conditioners, audio, and customization, and the demand for the installation of car navigation devices. The automotive aftermarket was in full swing. However, its momentum began to wane in 2000, and the automotive goods and services market has been gradually shrinking since then.

Against this backdrop, we were able to secure new sales by beginning to purchase and sell used cars and offer statutory safety inspection and maintenance services. However, due to the shrinking automotive goods and services market, the status quo has remained stagnant, leaving us unable to achieve significant growth for about 20 years.

Amidst increasing environmental changes, we have repeatedly formulated medium-term business plans and challenged ourselves, but we have ultimately been continually unable to fulfill these plans. In order to break out of this situation, the “Five-year Rolling Plan” was announced in FY2019.

 

We formulated the Five-year Rolling Plan with the objective of adjusting the five-year vision each year. To this end, we did not publicize our five-year numerical targets, only publicizing our quantitative plan for the current fiscal year, so that we could respond flexibly to changes in the business environment.

However, since FY2019 when the rolling plan was formulated, the business environment did not merely change, but entered a state of unpredictable turbulence. There was an onslaught of significant changes, such as a change in working style due to the COVID-19 pandemic, increasing prices due to Russia’s attack on Ukraine, and the sudden depreciation of the yen, leading us to review the plan based on current trends.

As a result, we expanded the area surrounding our main AUTOBACS business, expanding our business bases through the Car Dealership Business, BtoB Business, Online Alliance Business, and Lifestyle Business, and increased convenience through the establishment of a customer information platform and app development. Additionally, we shifted our overseas business from retail to wholesale in an attempt to increase sales.

Furthermore, in order to accelerate the implementation of these efforts, we implemented a variety of reforms to lay the groundwork for regrowth, including initiating structural transformation such as abolishing the officer system, restructuring Head Office operations, revising our personnel system, and developing executive candidates. As a result, we succeeded in bringing profit levels a step higher than they were before.

Among these efforts, the change of the franchise chain package made in the previous fiscal year—the first such attempt in 50 years of franchise operation—was the most challenging for AUTOBACS Group as a whole, not only for the Company but for its franchisees as well.

I promoted this change based on the determination that it is essential for stores and headquarters to work together in order for us to continue evolving at a speed that surpasses the changes in the business environment.

Specifically, starting on April 1, 2024, we lowered wholesale prices from the Company to stores and raised the retail royalty rate. This changed the mechanism so that store sales are now directly connected to AUTOBACS franchise chain headquarters sales, which allows stores and the headquarters to work together to develop and offer products and services from a customer-oriented perspective.

These measures are aimed not only at fostering a sense of unity, but also at promoting a previously lacking unification of the AUTOBACS brand. In order to make the most of the merits of franchises, there are many things that we should address as franchises overall, such as strengthening brand appeal. However, there have been some measures that each individual franchisee has determined whether or not to implement, and there were many areas in which everyone was not fully aligned. An example of this is DX solutions to improve customer convenience. Going forward, by using a part of royalties for DX promotion and other such medium- to long-term investments in growth, we will be able to introduce these measures at all stores early on, allowing us to further accelerate the evolution of AUTOBACS.

While the results of the changes of the franchise chain package are yet to be seen, under the Five-year Rolling Plan, we were able to utilize the business infrastructure cultivated through the Domestic AUTOBACS Business, including these changes, to increase consolidated net sales by 27.0 billion yen outside the AUTOBACS business.

I also announced a policy of a five-year cumulative total return ratio of 100%, and, when excluding the temporary profits from the sale of the official BMW/MINI dealership business in September 2023, the five-year cumulative total return ratio was 102.9%.

In May 2023, we announced a Long-term Management Plan that established a consolidated net sales target of 500.0 billion yen for FY2032. This is growth of double the net sales of FY2022, through the evolution of existing businesses as well as the creation of new businesses such as micromobility. In other words, it is a goal that we cannot reach if we continue as we were, so I think it is important to see how we can manifest the challenge as “realize your dreams” and put it into practice with a sense of speed.

Furthermore, during the Five-year Rolling Plan period, we were able to move ahead with laying the groundwork despite intense environmental changes such as the COVID-19 pandemic. Accordingly, in order to further accelerate regrowth and raise profit levels a step higher, we formulated the 2024 Medium-term Business Plan, “Accelerating Towards Excellence,” and announced it in May 2024.

The 2024 Medium-term Business Plan focuses our future direction on the two axes of retail and wholesale, which are our greatest strengths, and establishes the expansion of these on a global scale as our core strategy.

Furthermore, its strategy outline consists of three parts: “creating touch points,” “developing and supplying products and solutions,” and “establishing new business domains.” In terms of creating points of contact, we are turning past preconceived notions in our heads, aiming for low-cost, high-profit store operation by using fully equipped vacant properties and exploring flexible store forms.

In terms of developing and supplying products and solutions, we will promote digitalization and DX by reexamining our supply chain in order to accelerate the development of attractive products and services, and provide them to customers through digital means as well. In terms of establishing new business domains, we will flexibly change our business direction in line with mobility trends that are changing from moment to moment, while challenging ourselves to take on new businesses using existing assets as well as new business domains surrounding EVs and mobility.

When putting together the 2024 Medium-term Business Plan, I selected members mainly from among department managers and managers who will likely be responsible for our medium- term future as the next executives, and held repeated discussions with the Board of Directors. This is because I believe that, in human capital management, which is set forth as a source of value creation, it is important to make use of diversity in discussions when formulating a plan. I believe that it is my duty to work with them to advance the plan from formulation to implementation, utilizing their individuality and diversity, and that this will lead to our next evolution and creation of innovation.

Upholding the concept BEYOND AUTOBACS as a milestone of these 50 years, in order to ensure the safety of our communities while driving and enriching customers’ lives, I will continue to promote business structure reforms from the dual perspectives of “evolution” and “growth.”

Going forward, the environment surrounding mobility is sure to continue to undergo significant changes at a dizzying speed. No matter how the environment surrounding mobility may change, I will continue striving to reduce mobility-related hassles for customers and consistently offer them the “joy of going out,” both in and out of Japan. Furthermore, I will aim to evolve into a corporate group that is more highly favored by customers, and to turn us into a presence that serves as the foundation for their lifestyles by providing a “mobility lifestyle infrastructure.”

It has been 50 years since AUTOBACS was born. We have made it these 50 years thanks to the support of our franchisees, as well as all of the AUTOBACS Group staff, customers, business partners, shareholders, and other stakeholders. With this report, I would like to once again express my appreciation and deep gratitude.

Going forward, I want to engage in dialogue with everyone even more actively than before and utilize it in management. We are stepping up to a very big challenge. However, I have no hesitations. I want to carry out our next evolution alongside all of our stakeholders. I appreciate your continued support going forward.