"50% Market Share" strategic project

The goal of this project is for our management team and core employees to plan and review measures to enable USS Auto Auction to achieve a 50% market share and to map out a unique growth strategy. In the process, we also aim to strengthen our human resource base of project members and site leaders. The project will proceed based on analysis of the company's internal and external environment, and ongoing reviews of the growth factors and strategic concepts for achieving 50% market share. Moreover, we will work towards digitalization of our auto auction business model with the aim of revitalizing the used car market.

In order to make steady progress toward our long-term goal of achieving a 50% market share, we have established a strategic roadmap with the initial goal of achieving a 45% market share in the next three years. This strategy is targeting service improvements through facility and equipment enhancements including the construction of new auto auction sites and increased auction lanes. Moreover, we will build a digital platform that connects users to sellers, bidders, and the auto auction market, promote DX through the use of big data, and strengthen our human resource base. Through these efforts, we will efficiently acquire members and increase the number of vehicles on auction, thereby expanding our market share.

Under our "50% Market Share" strategy, we launched the "Breakthrough Project" for site-based new member acquisition in order to fulfill the strategies outlined in our roadmap. Through this project, each auto auction site is taking the initiative to acquire members and improve operational efficiency by setting priority themes to be implemented toward "Market Share 50."
In terms of strategic and systems planning, we will promote development of the "USS Digital Platform" as an information system to support the operations of existing members. We are developing this service with the goal of providing and using information to support all used vehicle distribution operations including trade-ins, purchases, auctions, sales, and exports.

We will promote acquisition of new members, operational efficiency, and consolidation of our strengthening of the HR base through site-driven measures.

Under the "Breakthrough Project," we identified four projects for priority implementation, and undertook a 90-day pilot initiative beginning in the autumn of 2024. ①Under the project to attract new members and plan attractive services, we conducted intensive membership marketing at four auction sites. ②Under the project to reclaim non-active members through auction site collaboration, we conducted marketing activities to reclaim members who have not auctioned any vehicles for at least 6 months through auction site collaboration in each area. ③Under the project to support data entry operations for vehicles on auction by balancing the workload among auction sites, and strengthened our emergency response capabilities. ④Under the workplace environment improvement project to encourage self-motivation among young employees, our young employees planned and implemented improvements to promote interactions with other departments, employee health and work-friendly environments, and subsequently provided follow-up feedback. As a result of the pilot, each project achieved outcomes that exceeded our initial expectations (see table below).
We plan to continue implementing multiple projects in FY 2025 and beyond.

Four priority projects and outcomes

We will strengthen business support for members through DX, and will accelerate strategy building and systems development to effectively promote sales.
Strategy to support operations of auction members through development of the USS Digital Platform.

To realize our successive goals of 45% and 50% market share, it is crucial to maintain and expand our base of auctioned vehicle sourcing end users and auctioning members. In other words, we believe that building the USS Digital Platform through B2B2C and B2B is a prerequisite for realizing our market share targets. A key point in our strategy to support member operations using this platform is that USS will provide services to enable our members to secure users, rather than USS attempting to secure end users directly.
One initiative under this strategy is our information provision service during end user replacement vehicle purchasing and information gathering stages. We will incorporate an AI-based system capable of predicting residual values of end user-owned vehicles into our existing USS member internet auction system (CIS) to support our members in securing end users.
Another initiative is the upgrading of our "Auction Agent" system that can be used to search for replacement purchase vehicles at the time of a trade-in/purchase appraisal. Auction Agent is a membership-based web site operated by USS that allows end users to browse vehicles on auction at 19 auto auction sites nationwide and place orders with our members. We will improve this service by enhancing the web site's consigned vehicle information available to end users. Moreoever, we will explore the development of end user services provided by USS via our members at completion of purchasing contracts in order to meet end user vehicle purchasing requirements, such as maintenance, insurance, and vehicle financing. These types of initatives will allow us better ascertain the status of our auto auctions and offer highly accurate auction proposals.
Furthermore, our sales representatives and auction site operations staff use our "USS Digital Platform" to conduct more efficient sales activities for our existing, non-active, and potential members, backed by data on auction site and area market attributes.

USS Digital Platform