■Nissan Tokyo Sales Holdings＜8291＞ Mid-Term Management Plan

3. Priority measures in the medium-term management plan

The medium-term management plan is progressing smoothly, and it is our policy to continue implementing the three priority measures of electrification leaders, safety/driving support technology, and mobility businesses. To that end, the idea is also to enhance the store network, which is the foundation for priority measures.

(1) Electrification Leaders

Electrification leaders make use of their strengths as pioneers of electric vehicles such as EVs, spread the excitement of driving electric vehicles to the world, and directly contribute to the promotion of carbon neutrality. Despite the fact that domestic manufacturers other than Nissan Motor Co., Ltd. have not entered in earnest, consumer interest in EVs is high, and motivation to buy EVs is growing. Therefore, the company decided to make use of EV know-how and infrastructure accumulated over 14 years, such as sales and sales systems, maintenance systems and equipment, quick charger networks, etc., and aim to achieve an electric vehicle sales ratio of 90% or more (already achieved and there is a possibility of an upward correction) and achieve an annual sales volume of 10,000 EVs. For this reason, it is planned to further strengthen sales of EVs such as Sakura, Leaf, Aria, and new models scheduled to appear in the future. Furthermore, the idea is to strengthen direct contributions to the environment and society by aiming to reduce CO2 emissions by 0.016 million tons from EV sales, disaster response through EV power transfer, and build a store network using renewable energy.

(2) Safety/driving support technology

The company has a policy of providing safety and security through advanced safety and driving support technology to more customers, and also supports daily safety and security with a maintenance system that supports it. Therefore, 1,400 test drives will be deployed to increase test drive opportunities at stores, and opportunities for customers to experience advanced driver support systems such as ProPilot will be expanded by utilizing “e-sharemobi”, etc. In addition, it is an idea to deploy vehicle-mounted fault diagnosis devices at all stores, introduce the latest maintenance equipment to obtain certification for specific maintenance systems, further improve the technical capabilities of mechanics who already have a long day, and proceed with the construction of an “electronic control system maintenance” system directly linked to a safe and secure car life. ProPilot is standard equipment or set as an option for 97% of major vehicle models, but the current ProPilot has evolved from version 1.0 to 2.0 where lane changes and hands-off driving etc. on expressways linked to car navigation systems are possible. However, there are also restrictions*, such as the need for drivers to continue monitoring.

※ For details, please refer to the company's or Nissan Motor's website.

(3) Mobility business

The policy is to accurately respond to the trend of shifting from ownership to leasing and sharing by strengthening the mobility business. As for the new car individual lease “P.O.P.,” which has been developed since 1997, sales know-how etc. are applied company-wide as best practices, and benefits to customers are appealing, leading to improvements in usage rates/retention rates and promotion of transfers. As a result, “P.O.P.” began rapid growth as a business contributing to the expansion of the company's new car sales through early replacements, and further growth is expected in the future. Also, in response to the strong sales of “P.O.P.”, it entered into private used car leasing, and it was a strong start. In addition to the mobility business, the company deployed Nissan Rent a Car at all stores and increased the number of cars in operation, while Nissan Motor Co., Ltd. integrated the car sharing service “e-ShareMobi” into Nissan Rent a Car. The idea is to improve convenience through such movements, expand opportunities to drive electric vehicles such as EVs and opportunities to experience advanced technology such as ProPilot 2.0, and promote the company's understanding of EVs and e-POWER.

(4) Store network

Stores are the main touch points that provide exciting experiences from store visits to car delivery while responding to the diverse needs of customers. Therefore, the store network is the foundation for implementing priority policies, and it is safe to think of store renewals and new store openings based on the “Nissan Retail Concept” as a strategy comparable to priority strategies. Plans are being carried out steadily, with 9 stores renewed for the 2023/3 fiscal year, 1 renewed store for the 2024/3 fiscal year, and 4 stores with new openings and renewals for the 2nd quarter of the 2025/3 fiscal year. Also, as a new touch point, we are actively incorporating digital technology and considering searching for new sales methods for automobiles, and although it may not be in the near future, there is a possibility that the new touch point will become one of the main sales channels.

4. investment plan

In the medium-term management plan, the company plans to actively invest in priority areas in addition to investing in existing areas, and will invest a total of 30 billion yen over 4 years. The breakdown is 25 billion yen for network renewal, environmental support, and business portfolio restructuring for sustainable growth, 2 billion yen for improving efficiency/productivity through IT, diversification of business, and strengthening best practices for human resources/DX as driving forces for transformation, and 3 billion yen for mobility-related and EV peripheral businesses to expand business areas through entry into new businesses and capital and business alliances. Profit improvements are being promoted through such investments, and an ROE (net return on equity) of 7.0% is planned for the fiscal year ending 2027/3. Therefore, we aim for an operating profit margin of 4.2% through network renewal, construction of new customer contact points, efficiency investments, etc., ROA (total net profit ratio) of 3.4% through investment aimed at expanding profits and effective use of assets (compression of unnecessary assets), and a D/E ratio of 0.26 times by aiming to optimize capital structure while ensuring financial safety. However, since 15 billion yen, which is half of the total investment amount, was invested ahead of schedule in the first year, results have also become apparent partly ahead of schedule.

(Written by FISCO Visiting Analyst Miyata Hitomitsu)