Buying regional auction houses and rebuilding them to the USS pattern (1999)

Buy, or build

To read this run of acquisitions only as buying scale to stack up market share is to miss the core of the judgement. For USS, opening a venue was heavy investment: a 3,000-car site cost $48.3M (¥6bn) to $52.7M (¥6bn) including land, more than twice the $23.7M (¥3bn) of consolidated net profit in the year to March 1999. Buying a company already operating in the region delivered the land, the buildings and the feet of the dealers who already drove there, all at once. What president Hattori Futoshi chose was acquisition as a way of buying land and time together.

That said, the venues it bought did not simply survive as they were. The Ryutsu Auto Auction hall, acquired in 2005, was folded into USS Tokyo in July 2011 and vanished. The regional operating companies placed venue by venue were absorbed into the parent in October 2012, so the number of legal entities that had swollen with every acquisition has since fallen instead. Buy it, rebuild it, and fold it when it is no longer needed — what this company has kept doing is not counting venues and adding to them, but choosing again and again where the cars for sale ought to gather.