NISSAN TOKYO SALES HOLDINGS CO.,LTD.

The Company Group's main source of revenue is the Automobile-Related Business, centered on automobile sales in Japan, particularly in Tokyo. Since Japan's economic trends significantly affect corporate and individual demand, there is a risk that a downturn in economic conditions could directly depress business performance. Countermeasures are being implemented based on the Group Crisis Management Regulations and BCP.

There is a risk that automobile demand will structurally decline in the future due to the decrease in the population obtaining driver's licenses amid the declining birthrate and aging population, as well as the notable trend of young people losing interest in cars, particularly pronounced in Tokyo. While demand is currently stable, a decline in unit sales over the medium to long term could affect business performance.

Vehicle inspections and statutory inspections in the Automobile Maintenance & Inspection business comply with the Road Transport Vehicle Act. If the law is amended, such as extending the validity period of vehicle inspections or reducing inspection items, there is a risk that revenue from the maintenance business would directly decrease. The Company continuously monitors trends in legal amendments and considers countermeasures.

If deregulation leads companies from other industries to enter the Automobile Maintenance & Inspection business or Used Car Sales business, there is a risk that intensified competition could lead to a decline in sales and profit margins. Competition is already fierce in the used car sales market in particular, and an increase in new entrants could further accelerate price competition.

If automobile-related taxes such as consumption tax and weight tax are further increased, there is a risk of decreased demand in the New Car Sales business and a shift in vehicle mix toward smaller, lower-priced vehicles. Tax system changes are a factor outside the control of the Company Group, and an impact on business performance may be unavoidable.

The New Car Sales business is based on dealership agreements with Nissan Motor Co., Ltd. and others, with new model introduction cycles and product supply being led by specific business partners. Changes in the management strategy of a specific business partner or its parts suppliers, as well as fluctuations in production or supply or suspension of sales due to disasters, misconduct, or other causes, could affect not only New Car Sales but also spill over into the Used Car Sales and Automobile Maintenance & Inspection businesses.

There is a risk that business interruption could occur, affecting business performance, if large-scale natural disasters such as earthquakes or floods, or a pandemic of a novel infectious disease, cause damage to stores or service facilities or human casualties. The Company Group prioritizes the safety of customers and employees above all else, implements necessary measures including hygiene management, and maintains a response framework based on its BCP.

The Company Group holds a large amount of customer information and various types of management information. If a significant information leak were to occur, there is a risk that it could affect business performance through loss of corporate trust and the incurrence of legal liability. While the Company strives to reduce risk through the development of information management systems, complete prevention is difficult given external threats such as cyberattacks.

If rumors about the Company Group, the Nissan Group, or the automobile sales industry spread through media reports or online, regardless of their accuracy, there is a risk that the corporate image could decline, affecting business performance. In particular, reports related to the parent company, Nissan Motor Co., Ltd., have a significant impact on the Company Group, making reputation management for the entire group an important issue.

There is a risk that changes in interest rates due to shifts in market conditions, or a deterioration in the Company Group's business performance and financial condition or a decline in creditworthiness, could lead to increased fundraising costs or difficulty in obtaining financing from financial institutions or a worsening of financing terms. In a rising interest rate environment, borrowing costs could increase and the financial burden could expand, making the maintenance of financial soundness an important issue.