Ft G thSt t fFuture Growth Strategy of ORIX Group’s ......e-Telematics provides concrete data that enables companies to implement eco-friendly driving and safe driving, and reduce

F t G th St t fFuture Growth Strategy of

ORIX Group’s Auto Related BusinessORIX Group’s Auto-Related Business

K b K iKatsunobu KameiPresident of ORIX Auto Corporation

Responsible for Corporate Financial Services and Maintenance Leasing Segment

30 November, 2015

Copyright © 2015 ORIX Auto Corporation All rights reserved.

,

Contents

Ⅰ. Business Overview

Ⅱ. Business Characteristics

Ⅲ G th St tⅢ. Growth Strategy

Ⅳ SummaryⅣ. Summary

Copyright © 2015 ORIX Auto Corporation All rights reserved. 1

Ⅰ Business OverviewⅠ. Business Overview


Ⅰ. Business Overview ―Company History―

Orient Auto Lease Co. was established （name changed to ORIX Auto Lease Co. in April 1989)Jun 1973

Feb 1985 Commenced car-rental business

Oct 1999 X Rent-A-Car acquired by ORIX Group

S k L i d b ORIX G

Feb 1997 Commenced fuel card (AMS Card) business

Jul 2001 Senko Lease acquired by ORIX Group

Sep 2001 IFCO and IFCO Rent-A-Car acquired by ORIX Group

Apr 2002 Became the first company to introduce car sharing service in Japanp p y g p

Nittetsu Leasing Auto acquired by ORIX GroupJul 2002

Oct 2003 Rent-A-Car Japaren acquired by ORIX Group

Jul 2004 Started introducing “ORIX ETC Card” towards corporate customers

Jan 2005 7 affiliates* engaged in auto-related business merged and formed ORIX Auto Corporation

Dec 2005 Rex Lease acquired by ORIX GroupDec 2005 Rex Lease acquired by ORIX Group

Apr 2006 Started offering ORIX Telematics services

3 separate rent-a-car brands consolidated into “ORIX Rent-A-Car” brandApr 2013


*ORIX Auto Lease, Senko Lease, IFCO, Nittetsu Leasing Auto, ORIX Rent-A-Car , ORIX Rent-A-Car Hokkaido , Japaren

3

Ⅰ. Business Overview ―Presence in the ORIX Group― ORIX Auto is grouped under Maintenance Leasing segment

Segment profits for FY2015.3 at 40.4bn yen, accounted for 12% of total segment profitsCorporate Financial Corporate Financial

7%

12% Maintenance LeasingMaintenance LeasingOverseasOverseas

ServicesServices

Lending, Leasing, fee businesses

Leasing, Lending, Investment in 12%（40.4bn yen）

1%

31%

Total Segment Profits

ORIX AutoORIX Rentec*

bonds, Investment banking, Asset management, Ship/Aircraft-related operations

*ORIX Rentec offers Precision

13%g

336.5bn yen(FY 2015.3)

Real EstateReal Estate

ORIX Rentec offers Precision measuring equipment and IT-related equipment rentals and leasing services

36%RetailRetail

RE development/rental/ facility operation, REIT asset management, and others

Investment and OperationInvestment and Operation

Environment and energy-related business, Principal

Life insurance, Banking, Card loan business


investment and Loan servicing

Ⅰ. Business Overview ―Segment Assets and ROA― Pursue segment assets growth and cost reduction, and maintain high ROA

(JPY Bn)Segment Assets and ROA

（Maintenance Lease Segment)

4.1% 4.1%3.9% 4.0%

4.5%

4.0%

4.5%

5.0%

600

700

800

2.6%2.4%

3.1%

2.5%

3.0%

3.5%

400

500

600

1 0%

1.5%

2.0%

2.5%

200

300

400ORIXAuto

0.0%

0.5%

1.0%

0

100

2009/3 2010/3 2011/3 2012/3 2013/3 2014/3 2015/3 2016/3 1H


2009/3 2010/3 2011/3 2012/3 2013/3 2014/3 2015/3 2016/3 1H

Ⅰ. Business Overview ―Segment Profits― Despite impacts from Lehman Crisis and Great East Japan Earthquake, stable profit

growth was achieved through business diversification

Segment Profits（Maintenance Lease Segment)(JPY Bn)

40

50

20

30(6 months)

10

20

ORIXAuto

02009/3 2010/3 2011/3 2012/3 2013/3 2014/3 2015/3 2016/3 1H


Ⅱ Business CharacteristicsⅡ. Business Characteristics


Ⅱ. Business Characteristics

Usage time

One stop solution provider for customers’ diverse car usage and needs

time

LongCar Rental

Market ShareNo.2 Auto Lease

Market ShareNo.1

Car Rental

Lease

Fleet size： 58,791 Fleet size：1.2 million

Car Rental

UsageFrequency Heavy UserLight User

Car Sharing

Market Share

Car Sharing

Fleet size： 2,209

No.2


Short,

(Data as of the end of September 2015)

8

Ⅱ. Business Characteristics ―Auto Lease― Leading company in the auto lease industry No.1 player with the largest fleet under management

Fleet Size：

Sales Locations：

1,212,000

50

Fleet Size

Repair Shops under Contract

1,212,000

9,000+

Lease Agents：

Used Car Auction Sites:( d b ）

700+

4Business commenced since 2013(Operated by ORIX Auto）

Used Car Shops: 10

Business commenced since 2013

ORIX Auto provides used-car lease with vehicles previously used under car rental or car leases selected under stringent quality standards



Ⅱ. Business Characteristics ―Car Rental (Rent-A-Car)― Largest fleet size and no. of locations among non-auto manufacturer affiliate leasing

companies Diverse vehicle lineup from passenger cars to commercial vehicles such as vans and trucks

Fleet Size：

Location：

58,791

1,008 （with 60 locations offers truck rentals）

Coverage：

,

Nation-wide in all 47 prefectures

（Unit: No. of vehicles)Peer Comparison

107,076Competitor A

(auto manufacturer

58,791ORIX Rent-A-Car

affiliate)

28,211Competitor B

(non-auto manufactureraffiliate)


(Data relating to ORIX Auto as of the end of September 2015. Data relating to competitor A and B as of the end of March 2015, based on “2015 Auto Rental Lease Year Book”)

10

Ⅱ. Business Characteristics ―Car Sharing― As the pioneer of this business in Japan, ORIX Auto has developed over 1,300 stations

centered in major metropolitan areas, with over 2,000 cars for sharing

Fleet Size： 2,209

No. of Stations: 1,365

,

No. of Members： 139,092

【Tokyo Area】 Tokyo Kanagawa Saitama ChibaBusiness Areas：【Tokyo Area】 Tokyo, Kanagawa, Saitama, Chiba,Ibaraki

【Chubu Area】 Aichi, Gifu, Mie【Kansai Area】 Osaka, Kyoto, Hyogo, Nara, Shiga【Okinawa】 Okinawa

※O IC d ll ll ORIX C Sh hi l※One IC card allows access to all ORIX CarShare vehicles



Ⅱ. Business Characteristics ―Value-Added Service Menu― Providing value-added services based on high level of expertise

Fleet Management BPO Telematics Service Risk Consulting Service WEB Info. Serviceg g

Fuel Card (AMS) Accident/Breakdown SupportETC Card Used Car Buy/Sell Service


Ⅱ. Business Characteristics ― Fuel Card/ETC Card ― We provide services that enable a control system that not only enhance work/cost

efficiency but also contributes to better compliance

No. of cards issued: No. of cards issued:

Fuel Card “AMS Card” ETC Card “ORIX ETC Card”

582,000

• Accepted by 65% of gasoline stations in

363,000

• “Corporate Card” is available for high volume Japan

• Standardized fuel price nation wide

(Benefits)

customers

(Benefits)(Benefits) Minimizes risk of non-compliance

Data feedback allows customers to identify abnormality and potential non-compliance

Prevent non-fuel purchases by disabling credit-card

(Benefits) Eliminate cumbersome admin. work Minimizes risk of non-compliance

Provision of admin. data and records for cross-checking on potential abuse

functionchecking on potential abuse

Prevent abuse by disabling credit-card function



Ⅱ. Business Characteristics ―Earning Trend― Further strengthen “Finance” and “Automobile” related expertise, expand services

income and the overall earning scale

節黎明期 ORIX A t E i B kd d T d節税資金調達

黎明期

Lease Revenues

S i I

ORIX Auto Earning Breakdown and Trend

35％

Services Income(Revenues relating to peripheral services and fleet management services)

28％

97 72%

3%19%19％ 28％

65％97%

81％ 72％

2005 20152010（）


（Earnings are after operating expenses and before SG&A）

Ⅲ Growth StrategyⅢ. Growth Strategy


Ⅲ. Growth Strategy ―Core Competence and Future Direc on― Capitalize ORIX Auto’s core competence to further expand operation scale and

maintain existing profitability

Top-class market share in the industry

Core Competence of ORIX Auto

Top class market share in the industry・ Optimization of asset growth and costs

Line up of value-added servicesp・ Increase services income・ Achieve high ROA with a non-capital intensive business model

Comprehensive offering of auto-related services・ Identify customers’ latest needs and enter into such new areas

Advanced fleet management know-how・ Expansion of auto-lease business among overseas group companies


Ⅲ. Growth Strategy ―Market― Approach customers already engaged in leasing transactions with car-rental, car-

sharing and other value added services services/products Focus on small client, non-fleet, and retail customer segments where potential of

transaction expansion is large

Large Client（>100 vehicles）

Mid-Size Client（30 to 99 vehicles）

Small Client（10 to 29 vehicles）

Non-Fleet（<9 vehicles）

Retail Customers

75% 51% 9% 3% 0.3%Leasing Penetration

1,800 1,850 37,500 17,600 53,500No. of Vehicles(000’)

Penetration

Lease unit

Non-lease unit

Expand customer base with value-added services and fleet management service

Enhance product line-up and sales channel

Growth StrategyGrowth Strategy


(Approximation by ORIX based on report “Auto Leasing Industry and outlook in 2015” published by YANO Research)

services and fleet management service sales channel

Ⅲ. Growth Strategy－Customer Needs and Business Expansion － In response to diversifying customers’ needs, we have been providing various highly

specialized services from peripheral services to fleet management

Mid-Large Clients

Small Clients

Mid Large Clients

Telematics Service (e-Telematics)BPO of Fleet Management

Optimization of vehicle usage

High

Small Clients

Mid-Size Clients

Optimization of vehicle usage（Lease/Car Rental/Car Sharing）Risk-consulting service

Support on emission reports

Specializa WEB information service（e-ERG）

Fuel Card (AMS Card)ETC C d

Accident/breakdown support

tion of Serv

WEB information service（e ERG）

Maintenance Lease

ETC Cardice

Finance Lease

Car SharingCar Rental

Low

Customers’ NeedsCustomers’ Needs Funding Rationalization of Compliance

Environmental Management


Customers NeedsCustomers Needs Funding Administration CostsEnvironmental Management

Safety

18

Ⅲ. Growth Strategy ―Total Services― We differentiate from our rivals and provide the best solutions to our customers’ needs,

covering the entire vehicle life cycle from vehicle purchase to maintenance and used-car sale

UsageUsage

LeaseCar rental

LeaseCar rental

Usage

LeaseCar rental MaintenanceMaintenanceMaintenanceVehicleVehicleVehicle Car rental

Car sharingCar rental

Car sharingCar rental

Car sharingMaintenance managementMaintenance managementMaintenance

Fuel cardMaintenance

Fuel card

Maintenance managementMaintenance

Fuel card

Vehicle purchaseVehicle

purchaseOptimal purchase

proposal (new cars）Optimal purchase

proposal (new cars）

Vehicle purchase

Optimal purchase proposal (new cars）

ETC card EMS

ETC card EMS

ETC card EMS

Certified used carsCertified used carsCertified used cars One-Stop Auto-Consulting

Service

Used vehicle l

Used vehicle l

Used vehicle l

Service

Vehicle operation

Vehicle operation

Vehicle operationsalesale

Buy/sell of used vehicles


sale


operationoperation


E-Telematics


E-Telematics

operation


E-Telematics

Copyright © 2015 ORIX Auto Corporation All rights reserved.Copyright © 2015 ORIX Auto Corporation All rights reserved.

E TelematicsE TelematicsE Telematics

19

Ⅲ. Growth Strategy ―e-Telema cs(1)― Enables customers to minimize vehicles emission and promote safer driving by equipping

vehicles with devices for data communication, GPS and internet(IoT) connections No. of vehicles installed with e-Telemactics increased from 60,000 units (2013/3) to

121,000 units (2015/9), a twofold increase in 2.5 years


Ⅲ. Growth Strategy ―e-Telema cs(2)― e-Telematics enhances our proposal to improve customers’ drivers’ habits, improve

their driving fuel efficiency and reduce their CO2 emission, and ultimately contribute to a decrease in road accidents

Safer Driving Effects of e-Telematics *Environmental Impact of e-Telematics

*Based on actual data of the 13,000 installed with e-Telematics** No. of risky driving behavior per vehicle per month


(Speeding, sudden acceleration/deceleration)

21

Ⅲ. Growth Strategy ―e-Telematics(3)― “e-Telematics” and “e-Telematics PRO” received Grand Prize (Corporate Division) at the

17th Green Purchasing Award on 4 November 2015

e-Telematics provides concrete data that enables companies to implement eco-friendly driving and safe driving, and reduce environmental impact

U h di h d d b h d i

【 The following points were made in relation to the award 】

Users have direct access to the data generated by the devices Consulting services are provided in addition to fitting devices to vehicles that naturally encourage eco-friendly

driving through “visualizations” These initiatives are valuable from the perspective of spreading eco-friendly driving and for their impact on

isociety

• The Green Purchasing Awards are given to organizations that attempt to spread and expand “green purchases,” which are preferential purchases from businesses thatwhich are preferential purchases from businesses that seek to reduce their environmental impact through environmentally conscious goods and services

• The Green Purchasing Awards aims to encourage further wide recognition and qualities of “green purchases” bywide recognition and qualities of green purchases by awarding outstanding “green purchases” cases

• Host：Green Purchasing Network (GPN)


Ⅲ. Growth Strategy ―Car Leasing for Retail Customers― Strengthen our car lease offering to expand our presence in the retail market Efficient market development via both Internet and face-to-face sales activities

Product offering that accommodates customers’ diverse needs in both new or used cars

Products

needs in both new or used cars

RRetail MaSale Channels

Internet：Car Lease Online『New Car Lease Online』 Initial quotation to application

all done online

arket

Face-to-face：Business PartnersStrong auto-lease sales agent network(700 t t ti id )


(700 partner agents nation-wide)

23

Ⅲ. Growth Strategy ―Ageing Popula on/Depopula on/BCP― Capitalizing on its know-how in vehicle procurement and extensive industry network,

ORIX Auto develops special purpose vehicles in its product offering

Greater needs for special purpose vehicles

Background

p p p• Ageing population• Depopulation• BCP during crises

Mobile ATMStrengths of ORIX Auto

Vehicle procurement Know-how in handling special purpose

vehicles gained through truck lease and truck rentals

(ATM) (Power Generator)


Ⅲ. Growth Strategy ―Overseas Market Development― ORIX Group conducts auto-lease business in 19 countries/regions worldwide With advanced fleet management knowhow accumulated in Japan, ORIX aims to

further expand its auto-related business abroad

Auto-repair in India

Auto-maintenance in Malaysia

Countries where we conduct auto-leasing business

Among the highlight countries above, where we intend to further

y


expand our auto leasing business

25

Ⅲ. Growth Strategy ―Overseas Market Development ―

ORIX’s Auto-Lease Business ranks no. 3 in the world and no.1(estimate) in Asia Pacific in terms of the scale of the fleet under its management

Asia is expected to be an important driver for the business’ future growthp p g

Global Auto-Lease Company Ranking ORIX’s Market Share Position Overseas

1. GE Capital (U.S.) Philippines #1Th il d #2

p y g

2. Lease Plan (Netherlands)3. ORIX (Japan)

4 ARI Fl t (U S )

Thailand #2Malaysia #2Indonesia #4

4. ARI Fleet (U.S.)5. ALD Automotive (France) Australia #5

Taiwan #5

(Source: HSBC Report (2014)) (Based on ORIX Internal Research)


Ⅲ. Growth Strategy ―Overseas Market Development ― To establish business model with high quality and high profitability overseas, we will

provide technical support to our overseas group companies

Strengthen Platform Strengthen Product

Plan

Strengthen Platform Strengthen Product Development (E.g.)

ActInvestigate

and Plan

D

Vehicle Procurement

WEB Info. Service

Pricing competitiveness through economies of scaleAdjust

Accumulate

DoImproveProposal

CheckProgress Control

Maintenance/Management

Telematics

Safe Driving Management

Improve customer

satisfaction

Enhance system and

process efficiency

Utilize data and improve profitability

Develop value added

servicesOpen stores for retail businessVehicle

SalesSales

Put the know-how gained in Japan into practice while considering each country’s inherent market characteristics


country s inherent market characteristics

27

IV. Summary

ORIX Auto is group under the Maintenance Leasing segment which accounts for 12% of the Group’s total segment profits and maintains a high ROA at around 4% Thisthe Group s total segment profits and maintains a high ROA at around 4%. This segment will continue to contribute to the Group’s stable growth and development in the future

Enhance specialization in “Finance” and “Automobile”, expand services income and the Group’s overall earning expansion

Increase market shares in corporate market with a wide range of value-added services. Strengthen presence in retail market with diverse product lineup and multifaceted sales channels

Develop various new products and services using ORIX Auto’s expertise and know-how in addressing social challenges such as ageing population/depopulation/BCP as well as technology advancement

Collaborate with overseas group companies for further business expansion abroad


Disclaimer These materials have been prepared by ORIX Corporation (“ORIX” or the “Company”) solely for your information and are subject to change

without notice. The information contained in these materials has not been independently verified and its accuracy is not guaranteed. No representations, warranties or undertakings, express or implied, are made as to, and no reliance should be placed on, the accuracy, fairness, or completeness, or correctness of the information or the opinions presented or contained in these materials.

These materials contain forward-looking statements that reflect the Company’s intent, belief and current expectations about future events and financial results. These statements can be recognized by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects,” “intends,” or words of similar meaning. These forward-looking statements are not guarantees of future performance. They are based on a number of assumptions about the Company’s operations and are subject to risks, uncertainties and other factors beyond the Company’s control. Accordingly, actual results may differ materially from these forward-looking statements. Factors that could cause such differences include, but are not limited to those described under “Risk Factors” in the Company’s most recent annual report on Form 20 F filed with the U S Securitiesare not limited to, those described under Risk Factors in the Company s most recent annual report on Form 20-F filed with the U.S. Securities and Exchange Commission and under “Business Risk” of the securities report (yukashouken houkokusho) filed with the Director of the Kanto Local Finance Bureau.

Some of the financial information in these materials is unaudited.

The Company believes that it will be considered a “passive foreign investment company” for United States Federal income tax purpose in the year to which these consolidated financial results relate and for the foreseeable future by reason of the composition of its assets and the nature of its income. A U.S. holder of the shares or ADSs of the Company is therefore subject to special rules generally intended to eliminate any benefits from the deferral of U.S. Federal income tax that a holder could derive from investing in a foreign corporation that does not distribute all of its earnings on a current basis. Investors should consult their tax advisors with respect to such rules, which are summarized in the Company’s annual report.

Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security, commodity or other instrument, including securities issued by the Company or any affiliate thereof.


Additional InformationFor annual and more historical data please access our website. A list of major disclosure materials is given below.

ORIX Website: URL: http://www.orix.co.jp/grp/en/IR Website: URL: http://www.orix.co.jp/grp/en/ir/

If you would like to be included on our e-mail list for major news announcements, please send your request to the address below.

ORIX Corporation Corporate Planning Department

W ld T d C t B ildi 2 4 1World Trade Center Building., 2-4-1, Hamamatsu-cho, Minato-ku,

Tokyo 105-6135, Japan

Tel: +81-3-3435-3121 Fax: +81-3-3435-3154


[email protected]

30

Documents

Ft G thSt t fFuture Growth Strategy of ORIX Group’s ......e-Telematics provides concrete data that enables companies to implement eco-friendly driving and safe driving, and reduce