AUTOBACS SEVEN
Integrated Report 2021
MESSAGE FROM TOP MANAGEMENT | VALUE CREATION | STRATEGY |
Content s
01 | Contents, Editorial Policy | Strategy | ESG | ||
02 | Vision, Philosophy | 13 | Five-year Rolling Plan | 34 | ESG |
17 Message from the Finance & | DATA | ||||
Message from Top Management | Accounting Officer | ||||
65 | Financial and Non-Financial | ||||
21 | Topic | ||||
Highlights | |||||
Business Continuity Initiatives | |||||
67 | Domestic Businesses, Major | ||||
in Response to COVID-19 | |||||
Consolidated Subsidiaries | |||||
Value Creation | |||||
Business Activity | 68 | Company Overview, Stock | |||
BUSINESS ACTIVITY | ESG | DATA |
AUTOBACS SEVEN Vision
2050 Creating Our Future Together
We face the issues of society, automobiles, and people's lives and create a brighter, more vigorous future. Our energy comes from our customers. We will steadily grow, day by day, as individuals and as a company, as we continue to shine.
As of 31st January, 2018
Philosophy
AUTOBACS Chain Management Mission
AUTOBACS has always been committed to providing
customers with the best solutions
for their car lifestyles and creating a rich and healthy
automotive society.
Our Ideal as a Company
Professional & Friendly
AUTOBACS continues to contribute to communities and societies, aiming to be a trusted
entity recognized as a professional and friendly organization by our stakeholders.
09 A History of Value Creation | Domestic AUTOBACS Business | Information |
23 | ||
11 Our Value Creation Process | Overseas Business | |
27 | ||
30 | Car Dealership, BtoB and | |
Online Alliance Business | ||
33 | Other Business |
Cautionary Note Regarding Forward-Looking Statements
Portions of this report that are not based on historical facts - areas addressing strategy, future business developments, and other topics regarding the future - reflect information available at the time this report was prepared and management's judgment.
Explanation of Names
Within this report,"AUTOBACS SEVEN Co., Ltd.,""AUTOBACS SEVEN"and"the Company"refer to the non-consolidated entity, while"the Company Group"refers to the consolidated entity."AUTOBACS"is a brand name, but also refers to individual retail stores and the entire retail chain of the AUTOBACS SEVEN Group. The terms"Chain"and"AUTOBACS chain"refer to the entire franchise chain that operates AUTOBACS stores. The "AUTOBACS Group"refers to total consolidated and franchise chain operations.
The Values Provided by AUTOBACS to Customers
Self-
expression
Safety Experience
and and
Security Discovery
AUTOBACS Code of Conduct and
Guidelines for Action
All our staff members at AUTOBACS SEVEN aim to grow together while deepening relationships of trust with stakeholders through our corporate practices. To ensure this, we comply with our Code of Conduct and Guidelines for Action.
WEB
AUTOBACS Code of Conduct and Guidelines for Action
https://www.autobacs.co.jp/en/company/absvision.html
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MESSAGE FROM TOP MANAGEMENT | VALUE CREATION | STRATEGY | BUSINESS ACTIVITY | ESG | DATA | |
Message from Top Management
A Year of Defining Priorities Amid a Rapidly
Changing Environment Due to COVID-19
Representative Director and
Chief Executive Officer
Kiomi Kobayashi
Remaining Steadfast in Our Commitment to Challenge at the AUTOBACS Group -
Creating New Car Lifestyle Values for a Future in Motion
In pursuit of our mission to inspire the continuous development of new and exciting car lifestyles, we at the AUTOBACS Group continue to uphold our Vision 2050 - Creating Our Future Together.
Today, the environment surrounding automobiles is facing a once-in-a-century transformational period. To meet this challenge, we boldly continue to act as car industry professionals, leveraging the knowledge, technological capabilities, and expertise we have cultivated over the past 70 years since our founding.
The year ended March 2021 was a year impacted deeply by the pandemic. Our priority, first and foremost, is to protect the health of our customers, business partners, and employees while we continue to take measures to prevent the spread of the virus. With the reaffirmation that cars are a vital part of the transportation infrastructure in our daily lives, this in turn impressed upon us the need to protect the safety and security of cars in times such as these.
At our retail stores and service pits, we employed and maintain strict guidelines around hygiene management while minimizing direct contact with our customers. At our offices, we required employees to work from home whenever a state of emergency was declared. We continue to promote teleworking through non-emergency months as well. While we adopted remote working some time ago, the spread of COVID-19 accelerated the process more than we had imagined. Our preparations however allowed us to implement our responses swiftly and promptly.
We also prioritized protecting the business of our AUTOBACS chain stores. To support the franchisees, we granted either reduction or exemption of payments based on individual store characteristics, payment deferral for product fees, or offered financing if needed. In terms of support for stores, we dispatched office staff to help in operations. We also aided in responding to customer inquiries,
taking reservations, and responding to other calls coming into the stores. At other times, we provided guidance to stores through online meetings.
Another major change caused by the pandemic was the increased need from customers for non-contact transactions. In response, we redesigned our official AUTOBACS.COM website in July 2020 to improve usability and allow customers to pay in advance online and pick up products in stores. In October 2020, we also released an upgraded version of our AUTOBACS app. The redesign featured improved startup speed and usability for a more comfortable booking experience. The new version of the app also provides alternative login methods, as well as the ability to self-register vehicle information conveniently by scanning the two- dimensional barcode on your vehicle inspection certificate.
At the same time, we have taken a fresh look at the value proposition at our physical stores. Consumers looking for products that are unavailable online, or who are unsure of either what the best product is for their car or its use, are likely to visit stores in person to find the right product for them and ask for advice. We also see many customers who buy tires online but prefer to leave installation to the professionals.
While we are in the current process of executing our Five-year Rolling Plan which defines the direction of our group
for the next five years, the wake of the recent COVID-19 pandemic required us to revisit the importance of responding to the changing needs of the times.
If we use a tree as an analogy to describe our entire Five-year Rolling Plan, our cross-industry network are the roots of the tree. Our historical foundation is the trunk, and the blossoms represent the touch points with our customers which we aim to see each business come into full fruition. However, simply offering everything on our own or investing
to develop superior technologies and services will not be fast enough to improve customer convenience amid changing purchase behaviors and use of cars. It is therefore precisely at this time of industry turmoil where we need to collaborate with diverse partners, combining strengths and advantages to overcome these challenges. In this way, by co-creating through strong partnerships, the path to creating new markets can be paved.
As one measure in support of this approach, we entered a comprehensive business alliance with BS-SummitBusiness Cooperative, a nationwide network for automobile maintenance, in August 2020. By combining the resources of the roughly 600 AUTOBACS Group locations and the member factories of the BS-Summit Business Cooperative, and by strengthening the local maintenance networks, we are building a system to provide high-quality services to car users.
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MESSAGE FROM TOP MANAGEMENT | VALUE CREATION | STRATEGY | BUSINESS ACTIVITY | ESG | DATA | |
Message from Top Management
Results for the Fiscal Year Ended March 2021 | (Billion Yen) | ||
FY March 2021 | YoY Change | ||
Net sales | 220.4 | -0.4% | |
Operating income | 10.5 | +39.4% | |
Net profit attributable to owners of parent | 7.0 | +87.3% | |
ROE (%) | 5.8% | +2.7pt | |
Results by Segment | (Billion Yen) | ||
FY March 2021 | YoY Change | ||
Domestic AUTOBACS | Gross sales* | 177.9 | -0.7% |
Business | |||
Operating income | 18.7 | +28.3% | |
Overseas Business | Gross sales* | 10.0 | -14.3% |
Operating income | -0.1 | ー | |
Car Dealership, BtoB | Gross sales* | 41.4 | +7.2% |
and Online Alliance | |||
Operating income | -0.2 | ー | |
Business | |||
Other Businesses | Gross sales* | 3.4 | +24.0% |
Operating income | -0.5 | ー |
*"Gross Sales" includes the transactions with other segments.
Domestic AUTOBACS Chain Store Net Sales (All domestic stores)*
(Billion Yen) | ||
FY March 2021 | YoY Change | |
Automotive goods | 215.5 | +0.3% |
Statutory safety inspection and maintenance | 20.4 | +3.5% |
Used car purchasing and sales | 27.1 | -2.1% |
Other | 4.0 | -15.8% |
Total for all stores | 267.0 | +0.0% |
*Includes net sales attributable to franchise stores |
Supporting and Expanding the Ever-Evolving Value of Cars Through Products and Services
stepping on the gas pedal rather than the brake. This device is now compatible with more than 200 car models and can be retrofitted to a wide range of models from various manufacturers. Pedal Watcher II was certified by the Ministry of Land, Infrastructure, Transport and Tourism as eligible for the Subsidies for Safety Support Cars. We also conducted a campaign to reduce the financial burden on customers by offering an additional discount to encourage installations.
The way we enjoy our cars is also changing over time. The spread of COVID-19 has led to people redefining cars as a space in which they can move freely and in peace. Interest in auto camping and outdoor activities has increased as leisure events that can be enjoyed while avoiding the risk of crowds. Since its renovation in 2018, our flagship store, A PIT AUTOBACS SHINONOME, has showcased sales floor displays that reflect the lifestyle of cars and culture, travel, sports, nature, and family. We will continue to propose new ways for consumers to enjoy cars, as our desire is for AUTOBACS stores to function as places in which customers experience and discover the excitement of AUTOBACS as the ultimate space for finding new and interesting things.
At the same time, we also support customers who are interested in our more traditional motorsports and car
customization services and store offers, helping them realize their own desires to enjoy their favorite cars in their own unique way.
To provide value in this way in meeting the diversifying needs of our customers, we must be trustworthy professionals who offer friendly spaces where customers feel free and safe to seek advice. Our commitment to challenge and improve ourselves constantly, so that we can confidently propose the best possible car lifestyle for every customer, is therefore essential in our journey.
It is my belief that our technologies and profound knowledge related to cars, which we have cultivated over the years, are valuable resources that have a critical role to be played in creating new markets and lifestyles beyond the traditional framework of cars. For example, the use of drones for delivery services and logistics is one initiative we have worked on as part of a comprehensive cooperation agreement on regional revitalization
we signed with Oita Prefecture in 2019. In February 2021, we started proof- of-concept testing for the delivery of pharmaceuticals via drones. The prompt delivery of necessary medicines using drones will help to reduce unanticipated shortages of supplies during in-home medical treatments. Drones can also shorten the time required to treat
symptoms outside of chronic cases. Our aim is to contribute to the improvement of local medical care and relax the burden on healthcare providers in remote areas.
Changes in the automobile environment do not always provide momentum for us. We may sometimes encounter situations in which conventional methods do not work. In new territories there may be no right answer, where we must repeat a cycle of taking on challenges and making mistakes to learn and determine our next move. It is my desire to foster a new corporate culture in which our group sees these changes
in the environment as new opportunities to take bold action. We intend to expand the scope of our expertise as cars evolve, leveraging partnerships and searching for the next market from a customer-focused and friendly perspective. Because there is no single right answer, this provides an opportunity for co-creation and working collaboratively to create the future.
Our job as a franchise headquarters is to create markets. Looking out into the future, we show the direction for which our franchisees should aim, presenting a better model for partnership and opening new paths. We believe our franchisees will build stronger ties with their local communities by embodying the direction we show to them.
The environment surrounding cars is changing dramatically. Autonomous driving is progressing toward practical use, and electric vehicles are becoming more popular. Many overseas startups are emerging to challenge the traditional automaker giants in creating and bringing inexpensive electric vehicles to market.
New concepts are changing the way we view the value of vehicles, including CASE (Connected, Autonomous, Shared & Services, Electric) and MaaS (Mobility as
- Service). Car-sharing and subscription car models, rather than purchase and ownership, are becoming more common. And these changes directly affect the way
we view our car lifestyles.
But no matter how widespread new values and services become, we must maintain cars mechanically to keep them safe and secure. The number of electronically controlled devices installed in cars is on the rise. These devices require not only conventional maintenance but also new technologies that can be considered as
"electronic wrenches." Furthermore, clear evidence of maintenance and mechanical adjustment must be retained in historical logs to clarify responsibility in the event of an accident. We see many cases of emerging companies who do not have global sales networks or dealer-
based sales channels and functions. Because of this, they are unable to offer extensive support to their customers. This means that the aftermarket will become more important than ever. The AUTOBACS Group is in a definitive position to meet these needs through our trove of experiences in the services and dealership business.
At the same time, we must continue to respond sincerely to social issues surrounding cars. One example of this effort is the Pedal Watcher II, a device we sell exclusively at AUTOBACS designed to prevent accidents caused by elderly or inexperienced drivers accidentally
A PIT AUTOBACS SHINONOME | P26 | Pharmaceutical Delivery via Drone | P48 |
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MESSAGE FROM TOP MANAGEMENT | VALUE CREATION | STRATEGY | BUSINESS ACTIVITY | ESG | DATA | |
Message from Top Management
Reexamining Our Organization and Talent to Survive as a 100-Year Enterprise
Under our Vision 2050 - Creation Our Future Together, the AUTOBACS Group aims to become a 100-year enterprise that continues to be indispensable to society. To this end we believe that we must engage in initiatives related to ESG and the SDGs, and in January 2021 we launched a project toward this goal, led by myself as chief executive officer.
Through our project activities, we reconfirmed social issues and reexamined materialities, defining our ideal image of society as a safe, secure, gentle society in which people, cars, and the environment exist in harmony. In addition to clarifying social issues for us to solve, we intend to further analyze the risks and opportunities these issues present, incorporating these into future management strategies. In addition, we will establish KPIs to monitor our activities.
For us to create new businesses by solving social issues requires every one of our 15,000 AUTOBACS Group employees to shine in their abilities and individuality. Our hope is for every employee to feel joy and pride in their work. With this
Conventional skills alone will not be enough to cope with this trend. In the past, mechanic repair was sometimes categorized as hazardous work. Today, the AUTOBACS Group strives to further develop highly trained, human-centered, and friendly professionals who contribute to the business as well as the safety and security of the company and our customers. We will continue to focus on training for official qualifications, as well as selecting AUTOBACS GUYS every year to serve as role models for mechanics and
to communicate our activities to society at large.
We will also focus on developing the next generation of talent who will represent the future management of the group. Given the many subsidiaries we operate in Japan and overseas, we also intend to place emphasis on developing a large pool of business professionals and providing them with opportunities to play active roles in central management positions.
in mind, we have focused on diversity- related initiatives. As one example, we incorporated measures to increase the ratio of female employees in our company. We also hold dialogues to listen directly
Car Dealership Business | P30 |
Taking on Challenges and Creating the Future Together with Our Stakeholders
to the opinions and concerns of female employees. I have personally learned what it feels to be in a minority position by going in alone amongst female employees. Only by participating in that manner, I was able to absorb many valuable lessons. And we have changed certain company programs based on ideas from these initiatives.
Another important topic is the training of mechanics. As mentioned earlier, the devices and technologies installed in cars are becoming more advanced.
AUTOBACS GUYS for FY March 2021 | P16 |
Since our founding more than 70 years ago, the demands placed on cars have changed with the times. Different needs have emerged from different objectives, including driving to look good, driving to spend time with friends and family, and driving as a means of secure and safe transportation during the global pandemic.
As a leader in retail and distribution, the AUTOBACS Group mission is to search for
what comes next, and what needs must be filled beyond change. We must search for ways to improve our products, services, and sales floors. We must think of how to propose and implement new ideas. To achieve these goals, it is essential that we foster a corporate culture and pool of human resources who are not afraid to take on new challenges, and to do so with a sense of urgency.
And in today's unpredictable social
environment, we must be quick to detect changes and turn emerging risks into opportunities. As a company that contributes to sustainable societies through our businesses, we will create a variety of values to realize societies which are safe, secure, and friendly.
It is my hope that our stakeholders will continue to look to us as a vital partner in taking on challenges and creating the future together.
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Autobacs Seven Co. Ltd. published this content on 07 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 March 2022 08:48:07 UTC.