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ATvalue is an export company that specializes in exporting used cars from Korea to over 24 countries around the world. Their used car exports have grown significantly each year, reaching $1.53 billion and 290,000 vehicles exported in 2011. They have established operations in Russia, one of their largest markets, where they have seen increased demand for Korean used cars after a ban on importing right-hand drive Japanese cars.

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ATvalue Business Proposal
Table of 1 Introduction Contents 1. Overview 4. S/W Development 1. Affiliated Research Center / 2. History Organization 3. Board of Directors and Shareholders 2. Patents 4. Organization 3. Research Outcomes 1. Carcok Service 2. Visual Caller Ring 2 3 Business Car Supply in Asian Region ATvalue Business 1. Export of Used Cars Plan 1. Export of Used Cars Purchasing and Securing Cars for Export 2. Used Car Export Flow by ATvalue 3. Business Strategy ATvalue Export Procedure Local Automobile Supply Business 2. Export of New Cars Estimated Capital and Procurement Plan 1. New Car Export Market Estimated Sales and Profit/Loss 2. Business Flow 4 3. Business Strategy Investment Proposal 3. Valuable Business 1. Educational Business 2. Development of Export Automation System Complex 3. Integrated Payment System 4. Green Scrap Service
01. Introduction ATvalue Information
1. Overview Company Name ATvalue Co., Ltd Established February 1, 2011 (Incorporated) President Min suk Kim Capital 250,000,000 Won Employees 28 (20 + 8(Specialists Outsourced)) Head Office 194-51, Okryeon-dong, Yeonsu-gu, Incheon, Korea Seoul Office Rm. 505 Haksan Cosmos, 110, Gwangjang-dong, Gwangjin-gu, Seoul, Korea Major Business Export Trade, Overseas Circulation, SW and Web Development, Education 4
2. History May 2012 Brocoling – Applied for patent for the Automatic Calling Method for Wireless Mobile Telephone Device and Its System 2012 March 2012 Brocoling – Applied for patent for the Transmission Holding Advertisement Method for Smart Devices and Its System March 2012 Venture certificate February 2012 Established affiliated research center February 2012 Officially opened integrated export management system ‘Carcok Service’ January 2012 Trial operation of integrated export management system ‘Carcok Service’ January 2012 Established business tie-up with Korea Insurance Development Institute December 2011 Established business tie-up with YMCA for training for export practices 2011 December 2011 Established business tie-up with Automobile Academy for export practices December 2011 Applied for patent for Carcok Service October 2011 Trial operation of the integrated export management system, ‘One Pass Service’ May 2011 Established Russian corporation, Koreacar.co (Ussuriisk, Уссурийск) April 2011 Concluded an export contract with Stanislav Russia April 2011 Began to develop mobile ‘Carcok Service’ March 2011 Began to develop ‘Carcok Service’, the integrated export management system March 2011 Established a new Development Division in Seoul February 2011 Changed the company name to AT value 2010 Signed an expert contract with Cagayan De Oro (Philippines) 2005 2009 2008 Signed an export contract with Ghana Signed an export contract with Iraq for the new car, Bongo III ~2010 2007 2006 Signed an export contract with Vietnam Signed an export contract with Jordan 2005 Established Samil Trading 5
3. Board of Directors and Shareholders Profile of Executives CEO Ji ho Yang •Kookmin Bank •Hanshin Inc. •Grand Industrial Development •Directly and indirectly supervised the establishment of various incubating companies and managed their operations •C.E.O of Seoul Biz Base •C.E.O. of Hanwon Motors •Managed KIH Kookmin Venture Fund and Seoul Ventures Holdings Company •Consulting for the financial structure of Korea Aerospace Industries (KAI) •Executive director for Doctor for Doctor, KS Music •Investment inducement and M&A for Sejong High Tech, Donga Precision Machinery, Samju Mulsan, Hanrim ST, Hyundai Machinery, etc. •Lecture on management, investment, and corporate M&A at various universities •Lecture on start-up business consulting 6
3. Board of Directors and Shareholders Profile of Executives COO Min suk Kim •Korea Finance Security: The company is in charge of transporting cash to 12 banks in Korea, builds and retains clients through efficient online marketing system. : Kookmin, Hana, Cheil, Shinhan, Woori, Exchange, City, etc. •NOW I&S: Online movie ticketing service provider, provides online marketing and KTF services • Ace Real Estate Consulting: Developed a system which systematically manage the establishment of committees, management of members by district, calculation of price of right, and information on the allocation of apartment by size for nationwide redevelopment and reconstruction promotion committee and association •Samil Real Estate Corporation: Developed programs for the calculation of the price of right of redevelopment association members and for promoting integrated marketing, analyzing and designing margins for new construction project. Developed and managed websites for 100 designated member stores •Samkyung C&M: www.jtech.co.kr, Established the network marketing system for redevelopment and reconstruction through on/offline training, books, blogs, and online club sites • Arcade Construction (C.E.O): Construction through the development of www.arcadecon.co.kr site, analysis of profit feasibility, construction of urban lifestyle residence, one room, multiplex house, and townhouses through PM or CM • ATvalue (C.O.O.): Concluded export contracts with various countries around the world, training of individuals on starting used car export business, and developed and applied for patent for Carcok Service which systematized the existing used car export process 7
3. Board of Directors and Shareholders Profile of Executives CTO Yeong mo Yoo January 1996 ~ December 2000 Hyundai Motors Overseas Division March 2001 ~ January 2005 Hyundai Motors Middle East Division March 2005 ~ January 2010 C.E.O. of Samil Trading February 2011 ~ Present ATvalue 8
3. Board of Directors and Shareholders Profile of Executives CSO Yeong jin Yoo •Homano Trading Management Support Team •Established Samil Trading •Samil Trading Used Car Export Devision •Joeun C&D Used Car Export Division (Exclusively for Russia) •Present: ATvalue Export Division Manager (Overseas Sales) •Present: YMCA and Automobile Academy instructor for export practices 9
3. Board of Directors and Shareholders Profile of Executives CMO Won ho Jeong January 1995 ~ January 2001 KIA Motors Sales Division April 2001 ~ January 2005 Hansung Motors Sales Team Manager June 2005 ~ January 2007 Auto Parts Seoul Branch Manager May 2007 ~ March 2011 TN Trading Executive Director February 2011 ~ Present ATvalue 10
3. Board of Directors and Shareholders 직원 이력 • PM for North Korean Defector Residence and Settlement Support Head of System of the Ministry of Unification • Developed automobile inspection system for Road Traffic Safety Research Center Authority • Ship clearance system for Korea Coast Guard Yeong seung Lee • Developed agricultural technological information and application system for Rural Development Administration • Developed agricultural technological information DB for Rural Development Administration • Developed H.E Engineering network outsourcing management system • Internet international telephone billing system for Moneyphone • Text and Voice Recognition System for Moneyphone • ARS Public Service Guide System for Gwangyang City Government • Developed electronic approval system for Jeonju City Government • Developed the group ware for Opennet • Hankook Tire Internal Document Circulation System • Developed MRP2 system for Korea Johnson & Johnson • Developed Dr. C compiler at BIT Computer 11
4. Organization Organization Map CEO COO Management Export Overseas Research Auction Sales and Planning Operation Operation Center Team Division Division Division Division 12
4. Organization Experience of Staff _ Export Division Manager Myeong gi Lee Manager Jin ho Seok 12 years of experience 8 years of experience •Manager, Hanmi Auto Service • Shinho Trade, Clerk •Daemyeong Trading, Head of Automobile Division • Sunwoo Motors Repair Team •Present: ATvalue Overseas Distribution Manager(Russia) • Hyundai Glovis Automobile Analysis Team • ADECAR Manager of Auction Division • Present: ATvalue Manager of Overseas Export Division Assistant Manager Hyang jae Kim Manager Deok jae Goh 3 years of experience 10 years of experience • Majored in Arabic Language, Chosun University •Hyundai Auto Service, Repair Team • Eins School, Teacher • SY Trade • Present: ATvalue Overseas Distribution Manager •C.E.O. of Car Max Auto Service (Middle East, Asia) •Present: ATvalue Manager of Overseas Export Division 13
4. Organization Experience of Staff _ Export Division Manager Dae hee Park Manager Dae jin Choi 5 years of experience 7 years of experience • Hansung Motors Sales Division • Dongbu Fire Insurance Vehilce Investigation Team • KIA Motors Sales Division • Founder and C.E.O. of Dongjin Trade • Sungeun Trading • Hangil Trading Middle East Division • Autozen Automobile Division • Present: Manager, ATvalue Export Division • Present: Manager, ATvalue Export Division 14
4. Organization Experience of Staff _ Affiliated Research Center Team Manager Min woong Jeong Manager Geon yeong Hong Graduated from Dept. of Visual Design, Hongik University • Developed plant management system for National December 2004 Produced the flash animation for Kyobo Life Auditor‟s Arboretum Office July 2005 Designed the brochure and took photographs for the Advanced • Web renewal of economic news for the Ministry of Program for Cultural Contents, Seoul National University Finance and Economy August 2005 Produced the commemorative video for the 30th anniversary of • Developed and managed Hanjin Apartment Sales Site Korea Management Institute • Developed broadcast monitoring and music source December 2005 Oye Hyang Industry homepage design, coding, flash filtering system for SBS January 2006 mineERP homepage design, coding, flash • Developed „Carcok Service‟ of ATvalue February 2006 Apoteke homepage design, coding, flash March 2006 Produced video describing the recruitment for Daum Communication 2006 Hongik University Graduate School of Architecture & Urban Design homepage design April 2007 ~ June 2008 EA Mobile Korea web design, mobile contents design Senior Researcher Gwan gook Kim 2007 Exhibition Video for the Reception of Gutenberg Award (Germany) by Professor Sang soo Ahn 2009 Web design for Sindoh Ricoh Central Branch 2008~2011 Team manager for IT Division of Samkyung C&M • UBIVELOX SE Division • SimpleSync maintenance & repair • Developed the global version of SimpleDrop Researcher Min ji Sohn • Designed and developed NeoSimpleSync •Developed u-City Event Monitoring System (Silver Prize at the Software • Developed SKT RealEdu, educational application Competition 2009 at Baekseok University) •Developed Android based food ordering system •Developed Android based electronic product follow-up service management system •(Grand Prize at the Software Competition 2010 at Baekseok University) 15
02. Business _ Export of Used Cars ATvalue Business
1. Export of Used Cars 1) Export Trade of Used Cars Export Trade Business Overseas Car Distribution Business ■ Export of new and used cars ■ Russia prohibited the import of right-hand drive cars  decreased the demand for Japanese used cars, increased the demand for ■ Forwarding and shoring Korean used cars. ■ Discovery of new buyers and pioneer of emerging market ■ Established the Russian corporation, Koreacar.co, in May 2011, and engaged in used car circulation and sales activities according to local demand. ■ Expanding sales network in the far east Russian region and Major Clients (24 Countries) securing local dealers • Middle East: Iraq, Jordan, UAE, Yemen, Syria • Africa: Sudan, Egypt, Ghana, Nigeria • South America: Costa Rica, Nicaragua, Chile, Paraguay • Asia: Russia, Mongolia, Tajikistan, Kyrgyzstan, Kazakhstan, Uzbekistan, Philippines, Cambodia, Laos, Vietnam 17
1. Export of Used Cars 1) Export Trade of Used Cars 18
1. Export of Used Cars 1) Export Trade of Used Cars Growth of Used Car Export Market Currently, the domestic consumption market for used cars is stagnant due to excessive competition, economic downturn, and increase of oil price. However, the overseas market is stable and also shows high growth potentials in terms profit. Scale of Used Car Export 30 25 20 15 10 5 0 Export Scale 2008 Export Amount 2009 2010 2011 Export Amount ($) Amount: $600 Amount: $1 Amount: $1.25 Amount: $1.53 Export Scale (Quantity) Million Billion Billion Billion Scale: 150,000 Scale: 190,000 Scale: 240,000 Scale: 290,000 Maintains approximately 20% or higher growth rate every year 19
1. Export of Used Cars 2) Growth of Used Car Export Market Economy is Expected to Look up for Sometime with the Export of Used Car at Sokcho Port (Yeonhap News, December 5, 2011) 4,529 used cars were exported to Russia through Sokcho Port in 2011 Increased greatly from 833 cars in 2009 and 1,138 97th Edition of Close Up Industry cars in 2011 (E-Daily, May 23, 2012) View Program ‘Hot’ Response to Korean Used Cars in Overseas… 2009 833 Cars Seeking a Way Out through Export (KBS1, November 17, 2011) View News 2010 1,138 Cars Civil War in Libya Drawing to an End... Used Car 2011 4,529 Cars Export Complex Coming to Life 20 (YTN, August 26, 2011) View News
1. Export of Used Cars 2) Growth of Used Car Export Market Export of Korean Used Cars 2010 2011 2010 2011 Amount Quantity Amount Quantity Amount Quantity Amount Quantity ($1,000) ($1,000) ($1,000) ($1,000) Jordan U.A.E Russian Federation Myanmar Mongolia Nigeria Libya Syria Ghana Israel Laos Afghanistan Chile Sahrawi Arab Democratic Republic Vietnam Peru Kirghizstan Iran Cambodia Vanuatu Philippines Ethiopia Costa Rica Guatemala Kazakhstan Tanzania Thailand Madagascar Tajikistan Dominican Republic Egypt Armenia Sudan Guinea Nicaragua Belarus Iraq Turkmenistan Yemen Tunisia USA Djibouti Uzbekistan Paraguay Pakistan Marshall Islands Cote d'Ivoire Lithuania 116 Others Total 21
1. Export of Used Cars 2) Growth of Used Car Export Market Export of Korean Used Cars to Russia Due to the ban on right-hand drive cars of Russia, the import of Japanese cars is restricted while the preference for Korean cars is increasing. Our export share increased from 2% up to 7%. 2010 2011 Russia 12,168 ($151,667,000) 29,753 ($409,790,000) Major Clients and Export Scale (Top 8 Countries) Unit: $ 1,000 2008 2009 2010 Rank Country Number of Number of Number of Amount Ratio (%) Amount Ratio (%) Amount Ratio (%) Cars Cars Cars 1 Jordan 188,849 54,954 20.5 268,722 52,962 34.7 326,478 74,530 39.1 2 Libya 87,488 18,163 6.8 149,570 32,692 19.3 134,537 26,531 16.1 3 Vietnam 179,682 14,418 5.4 218,318 25,776 28.2 186,960 14,402 22.4 4 Laos 29,794 8,025 3.0 28,677 9,683 3.7 62,730 11,414 7.5 5 Ghana 20,124 13,332 5.0 21,951 9,326 2.8 33,528 11,324 4.0 6 Sudan 36,073 10,892 4.1 45,293 14,014 5.8 40,424 10,168 4.8 7 Philippines 9,415 3,677 1.4 22,973 7,405 2.9 32,298 8,191 3.8 8 Kirgizstan 53,286 27,645 10.3 18,751 8,895 2.4 16,926 6,896 2.0 Total 604,711 151,106 100.0 774,255 160,753 100.0 833,881 163,456 100.0
1. Export of Used Cars 2) Growth of Used Car Export Market Comparison of Domestic Consumption and Export Domestic Item Export Remarks Consumption Purchase of Cars All Types of Cars Cars Preferred in Each Country EX) Russia: 4WD, SUV, Starex, etc. Proportion to Price is determined at a high level compared with Higher than Domestic Market Margin Domestic Market domestic market price due to current production line and Price Price lack of technology 8% of the purchase price is returned in accordance with 8% of Purchase Price is deemed input tax deduction on recycling of scrapped Tax Benefit None Returned materials etc. (Article 108 of the Restriction of Special Taxation Act) Average Period of 1 month ~6 High turn over ratio, low inventory ratio 1 week ~ 1 month Sales months Save on maintenance and management expenses TT: Exported only after the price of the car is paid Follow-up Service Possible Buyer‟s responsibility FOB: Overall risks and burden of expenses are handed over from the seller to buyer
2. Used Car Export Flow Liability Checklist▶ Insurance Checklist▶ ▶ Step 1 Order from Step 3 Transportation of Step 4 Delivery of Cars to Step 2 Purchase of Cars Overseas Buyers Cars Logistics Center Export contract with AT Purchase cars from Deliver cars to the head Arrival at AT value value’s overseas buyer Carcok Service users office of AT value Logistics Center and member stores (Incheon) and inspection Step 5 Cancellation of Car Step 7 Buyer Car Step 8 Payment of Fees Step 6 Customs Clearance Step 9 Export and Tax Registration Confirmation and Distribution of Profits Gu Office CI PL Request Shipper for Application for Embarkation Payment of Logistic Fees Load cars and export Cancellation of Confirm cars with Customs Agent: Issue Distribute profits to Process post-procedures Registration overseas buyers Export Permit investors (tax) Liability Checklist▶ Insurance ◀ 24
2. Used Car Export Flow 1) Used Car Export Contract Contract – Buyer Contract ALTERNA (Russia) Asia bus DV (Russia) SMILE (Russia) ROSKOR (Russia) Buyer Business Status 25
2. Used Car Export Flow 2) Purchase of Cars to Export We send out the purchase list to sellers such as used car trade complex, sales representatives for new cars, rent-a-car companies, transportation companies, and individuals through on/offline purchase marketing network and purchase cars. Sales Representative for New Cars ATvalue DB Rent-a-Car Companies and Rent-a-Car Companies Hyundai, Kia, Ssangyong around the Country , GM, etc. 1,027 22,215 Dealers Used Car Sellers Transportation 3,450 Sellers / 25,031 Companies Dealers 10,098 Companies Individuals List of Members + DB 38,000 26
2. Used Car Export Flow 2) Purchase of Cars to Export ■ Reverse Auction System – The head office directly secures items based on the database of the auction list Bid for Used Cars 27
2. Used Car Export Flow 2) Purchase of Cars to Export 1. We established the business tie-up with Carsdaq which exclusively handles the trade of used cars in Sell Cars to Gmarket, the Korean branch of eBay, the world‟s Export largest online shopping mall and we opened Atvalue‟s own exclusive page for the purchase of export cars and introduced the matching system that preferably receives the information about export cars, making it possible to secure a large number of cars. 2. We established business tie-up with (MPark) Land, the biggest used car trade complex in Korea to have 15,000 cars supplied with priority. 3. We also established business tie-up with Renault Samsung, Chevrolet, and Ssangyong Motors to have the supply of 2,000~3000 aged cars each month. 4. We also have contract with express bus, intra-city bus, and other bus companies such as Dongyang Express Bus to have the supply of 50~100 aged busses each month.
2. Used Car Export Flow 2) Purchase of Cars to Export Document to Prepare Major Procedures 1. Check Car • Sales Contract 2. Check Document 3. Inquiry -Inquire Original (Check for Provision Document Received Seizure, Bonds) -Inquire Business Registration (for business ownership) • Certificate of -Inquire Accident History (for accident) Seal Impression 4. Sign Contract (Pay Price and Take Over) • Vehicle Registration ■ Use of Car Analysis Tool 1. Work on 3 Criteria -500,000 won for popular cars -200,000 won for popular cars (hood, both front -1,000,000 won for regular cars 5. Replacement of hood -300,000 won for regular cars fenders, and front panel) or rear fender -2,000,000~4,000,000 won for luxury cars -2000,000 won or higher 2. Work on both wheel -1,500,000~2,000,000 won for popular cars - 50,000 won deduction on each cut houses, roof, a filler, b -3,000,000~4,000,000 won for regular cars -9 or more cuts: Require full coating filler - Cost varies depending on car price for luxury cars 6. Painting (1) 500,000 won deduction on small cars (2) 700,000 won deduction on medium cars -1,000,000~1,500,000 won for popular cars (3) 1,000,000 won deduction on large cars 3. Single house -1,500,000~2,000,000 won for regular cars - Cost varies depending on car price for luxury cars The analysis tool is used at the purchase -100,000 won for popular cars to appraise the car accurately and maximize profit at the 4. Replacement of doors -100,000 won for regular cars sales stage! -1,000,000 won or higher for luxury cars 29
2. Used Car Export Flow 3) Consignment and Inspection of Cars Delivery of purchased cars to logistics center. Inspection of car status before consignment, insure car for the loss during consignment process. Document to Prepare Major Procedure • CI(Commercial 1. Prepare CI (Commercial Invoice), PL Invoice) (Packing List) 2. Attach the certificate for the cancellation of vehicle registration to • PL(Packing List) CI and PL and send to the customs agent 3. Issue of export declaration 4) Vehicle Registration Cancellation Procedure Document to Prepare 차량의 국내 등록 말소 Major Procedure • Application for 1. Preparation of documents required for the cancellation of the vehicle the Cancellation registration of Registration -Application for the cancellation of (for Export) registration, invoice • Invoice 2. Submission of documents to the Gu Office -Application for the cancellation of Document Received registration, invoice, vehicle • Certificate for registration, certificate of seal impression, license plate the Cancellation 3. Issue of the Certificate for the of Vehicle Cancellation of Vehicle Registration Registration 30
2. Used Car Export Flow 5) Customs Clearance Document to Prepare Major Procedure • CI(Commercial 1. Prepare CI (Commercial Invoice), PL Invoice) (Packing List) 2. Attach the certificate for the cancellation of vehicle registration to • PL(Packing List) CI and PL and send to the customs agent 3. Issue of export declaration Document Received • Certificate for Export Declaration 6) Confirmation of Cars by Buyer Major Procedure 1. Confirmation of cars by buyer 2. Compare with vehicle registration (performance inspection table) 3. Hand over vehicle and export permit when there is no trouble 31
2. Used Car Export Flow 7) Payment Advanced Payment Base Cars are loaded to the ship after the buyer confirms actual cars. Payment is made after confirmation, and then the cars will be handed over. T/T [Telegraphic Transfer Remittance] Transferred to the account designated by the other party through the bank. Since the money is directly sent to the account without requesting the bank for collection, the payment is fast, fees are saved, and the risk in the delay of payment is eliminated. FOB (Free On Board) refers to the trade condition where the seller (exporter) loads the promised cargo to the ship designated by the buyer (importer) and shoulders overall expenses and risks until the cargo is handed over to the importer on the ship. In other words, the burden for overall risks and expenses is transferred from the exporter to the importer when the cargo is loaded to the ship at the export port over the railing on the ship‟s side. Since the buyer takes overall responsibilities after cars are loaded to the ship, the exporter does not take responsibilities for follow-up service, insurance, or loss of cars. 32
2. Used Car Export Flow 8) Export and Tax Deemed input tax deduction on recycling of scrapped materials etc. (Article 108) In case a collector (ordinary taxable person) of recyclable waste resources and used goods (limited to used cars) acquires such resources or goods from an entity which cannot issue a tax invoice such as the central government, local government, tax-exempted business, persons subjected to simplified taxation, and individuals and manufactures, processes, or supplies them, deem input tax up to a certain rate and deduct it from output tax in order to promote environmental preservation through the efficient collection of waste resources. Acquisition Value x 9/109 -Deduction Rate for Used Car - Applicable Business: Those who registered as automobile sales business in accordance with the Automobile Control Act, those who export used cars - Applicable Items: Used goods – The “used car” according to the Automobile Control Act, however, excluding the cars for which the period between the manufacture date recorded in the original register of the car and the date the declaration of export is received as recorded in the export performance report is less than 1 year in case of exporting used cars. 33
2. Used Car Export Flow Car Export Simulation Investment: 20 Million Won / Purchase Price for 1 Car: 20 Million Won / Export Price: 21 Million Won (Margin = 1 Million Won) Deduction (Return) of Input Tax for Recyclable Waste Resources: Estimated at 8% / other ancillary charges excluded Deduction Deduction (Return) (Return) of Input Number of Accumulated Investment Margin per Car of Input Tax for Tax for Period Cars Profits Profit Rate (Purchase Price per Car) ⓐ Recyclable Waste Recyclable Waste Purchased (ⓐ+ⓑ) Resources Resources ⓑ 2 Months 20,000,000 1 1,000,000 0.08 1,600,000 2,600,000 13% 4 Months 20,000,000 1 1,000,000 0.08 1,600,000 5,200,000 26% 6 Months 20,000,000 1 1,000,000 0.08 1,600,000 7,800,000 39% 8 Months 20,000,000 1 1,000,000 0.08 1,600,000 10,400,000 52% 10 Months 20,000,000 1 1,000,000 0.08 1,600,000 13,000,000 65% 12 Months 20,000,000 1 1,000,000 0.08 1,600,000 15,600,000 78% 14 Months 20,000,000 1 1,000,000 0.08 1,600,000 18,200,000 91% 16 Months 20,000,000 1 1,000,000 0.08 1,600,000 20,800,000 104% 18 Months 20,000,000 1 1,000,000 0.08 1,600,000 23,400,000 117% 20 Months 20,000,000 1 1,000,000 0.08 1,600,000 26,000,000 130% 22 Months 20,000,000 1 1,000,000 0.08 1,600,000 28,600,000 143% 24 Months 20,000,000 1 1,000,000 0.08 1,600,000 31,200,000 156% total 34
3. Business Strategy 2. Supplier 1. Manage and Advantage Contract Discover Buyers Used ATvalue Buyer Gain Profits Car Supplier (for Continue Demander exportation) Trade 3. Collect cars 4. Minimize Car and secure smooth supply Loss and Damage 1) Management and Discovery of Buyers More prompt, aggressive, and systematic discovery and management of buyers compared with existing small used car exporters. - We secured dealers fluently speaking the language of the buyer for enhanced sales activities. - We operate meeting facilities and lounge for buyers in export offices. - We provide the information on export volume directly from the shippers leaving to buyer‟s nations to buyers. - We are expanding the trade and export volume from supplier to 1 buyer to B2B trade across borders. 35
3. Business Strategy 2) Supplier Advantage Market Contract Risk hedge for the cancellation of buyer order - If 10% of contracted price is paid in advance at the contract, goods will be supplied preferably Exemption clause concerning the period for securing cars - There are far more demands than the supply in the current market. for exportation We sign the contract with the advantage to the supplier, and if a buyer breaches the contract terms, we can export the same type of cars to another buyer on the same terms. 36
3. Business Strategy 3) Minimize Loss during Circulation Process We inspect our cars in each stage and are thoroughly insured in order to minimize loss from the purchase cars to warehousing at the distribution complex and delivery to buyers. 37
02. Business _ Export of New Cars ATvalue Business
1. New Car Export Market 1) Demand and Supply of Korean Cars (New Cars) - New car exporters springing up everywhere The demand for Korean cars is increasing in the regions without factories of Korean car makers such as Hyundai, KIA, Ssangyong, etc. However, consumers have to wait a long time to purchase new cars through local official importers and a number of small new car exporters are established in Korea for the high profit rate compared with the cars parallel-imported from Korea. However, each manufacturer is limiting the purchase of their cars sold in Korea by individuals or corporations to protect local official importers that the new car exporters are hiring part-time brokers who lend their names for the purchase of new cars. 39
2. Structure of New Car Export Business 2) New Car Export System of ATvalue Order from Overseas Buyers Contract with Overseas Buyers Small quantity based contract regardless of the local Large quantity based contract in the regions without official importer official dealers New Car Exporter Domestic Manufacturer (Agency) Domestic Manufacturer (Head Due to the limitation on the number of Office) purchases, companies are borrowing names of part-time Direct contract with the head offices of Hyundai, KIA, Ssangyong, etc. brokers to buy new cars 40
2. Business Flow 1) ATvalue New Car Export Flow Supply of Supply of Cars Cars Domestic Overseas Buyer Manufacturer Hyundai, KIA, Ssangyon g, etc. P-Bond 30~40% L/C or TT L/C or TT 41
3. Business Strategy 1) Car Export Contract Contract – Buyer Contract Contract with Syria for the Supply of 500 Tuscon IX ATvalue concluded the contract with supplier advantage with buyers around the world the company developed through many years of experience in trade based on the market structure where supply is noticeably small compared with the demand. 42
3. Business Strategy 2) Establishment of Branches Branches help securing local Supply and Business Facilities of Hyundai/KIA cars buyers and steady in the Middle East/Africa/Europe management as well as import/export related Europe Middle East operations. We established 2 branches in the Middle East and 1 branch in Russia including Iraq, Syria, and Jordan considering the relationship with the operating facilities directly managed by Africa manufacturer‟s local branches. Middle East Operation of Follow-up Service Center We are also operating follow-up service centers along with the branches to help local sales by buyers and are planning to increase the number of operating Eastern Europe centers gradually following the sales. 43
02. Business _ Valuable Business ATvalue Business
1. Valuable Business – Educational Business 1) Educational Business ■ ‘Used Car Export Practice’ course at YMCA and Automobile Academy ■ ‘Used Car Export Practice and Business Registration’ course for Carcok Service members General public who understands the benefit of export, but could not approach export business due to lack of actual experience 01 02 03 Automobile General Public Future Industry Interested Entrepreneurs Workers in Export Future entrepreneurs wishing to start a Has basic knowledge about automobiles, business safely with a small capital persons engaged in related industries with potential to (Supports the entire course from show quick progresses by learning about export beginner to practice) practices 45
1. Valuable Business - Educational Business 1) Educational Business Fulfilling social function with the training courses related with the export of used cars Job training for workers from multicultural family Display enhanced communication skills by understanding the used car export business in the trade between countries around the world. Job training for workers from multicultural families who can be ignored as cheap-laborer. Training and Application Negotiation with overseas buyers / Customer response / Import dealer for corresponding country Job training for persons with disabilities Provide the opportunity to start a business or to learn in connection with the Korea Employment Promotion Agency for the Disabled under the Ministry of Labor. Organize training programs customized for the skill level of the individuals with disabilities, help finding jobs in export related areas. Training and Application Export administration / Repair and automobile related services 46
1. Valuable Business - Educational Business 1) Educational Business System of Educational Business Step 1 Step 3 Step 2 Business Tie-Up for Start up Achieve Train Targets Business and Employment Education Goals Korea Employment Multicultural Promotion Agency Local Public Family Support Offices Persons with Center Creation of Jobs Disabilities and and Sharing of Multicultural Composition of Work Education Families Infrastructure Small and Medium Business Administration / Ministry of Support for Business Provide Knowledge Economy Commenc ement ATvalue Trade Training Center Refund Support for the Course of Support for Business Certification Ministry of Future Commencement Labor Successful Start- of Life-Long Entrepreneurs Education up of Business Small Business Ministry of Development Board of Labor Center Education 47
1. Valuable Business - Educational Business 1) Educational Business Training of Future Entrepreneurs for Used Car Export Business There are no institutes that provide exclusive training on the export of used cars. We transmit our know-how about export procedures and business management to future entrepreneurs, and provide the opportunity to establish independent companies by supporting training fees and the fund for staring a business. Comparison of Staring Export Business and Starting Other Businesses -Initial Investment- BBQ Restaurant Export Business Comparison Coffee Shop (100m2) Remarks (100m2) (660m2) Store Purchase Cost Class B Commercial District Class B Commercial District (Incheon Export Complex) In other forms of business, the store purchase (Deposit) 50,000,000 won 100,000,000 won 3,500,000 won cost increases when the premium is added Membership Fee 10,000,000 won 10,000,000 won None Exhaustible expenses (not refunded) Initial facilities cost which will be eliminated at the Facilities Cost 10,000,000 won closure of business is the most burdensome cost for 40,000,000 won 100,000,000 won (Interior) (Office Setting) those who start the business 20,000,000 won Used car export business can be started with at Fixtures and Cost of Products 20,000,000 won 120,000,000 won (Purchase of Cars) least 5,000,000 won 90,000,000 won~ 300,000,000won Total At least 120,000,000 Won At least 330,000,000 Won 30,000,000 won compared with other forms of businesses -Fixed Monthly Cost - BBQ Restaurant Export Business Comparison Coffee Shop (100m2) Remarks (100m2) (660m2) For other businesses, the rent increases when the Rent 5,000,000 won 7,000,000 won 1,200,000 won premise is located in class A commercial district Labor Costs 10,000,000 won 5,000,000 won 5,000,000 won Miscellaneous Costs 1,200,000 won Electricity, utilities, and other supplies 2,000,000 won 500,000 won expenses Total 17,000,000 won 13,200,000 won 6,700,000 won Approximately 50% of fixed cost compared with other forms of48 businesses
2. Valuable Business – Development of Export Automation System Complex 2) Development of Export Automation System Complex Automated system for every one to export ATvalue Automation System Once the car is delivered to ATvalue Logistics Center, all data are Deliver cars from those who wish to export collected and export related procedures will be automatically used cars (individuals/companies) progressed. Designed to help the user to easily export cars without sophisticated knowledge and experience about exporting used cars. Scan license plate – send export information The user only needs to bring the car and approve the export. With the delivery, the export related documents will be prepared Inspect vehicles/check results automatically through the scanning of the license plate, and all related processes such as the preparation for export from the confirmation of fine payment status to the inspection of car Buyer matching condition and repair, as well as the contract with buyer and shippers will be automatically completed. Remittance of Payment / Notification of Expected Returns on Purchase Loading / Exporting 49
2. Valuable Business – Development of Export Automation System Complex 2) Development of Export Automation System Complex Prospective Tenant Example of Complex Companies - Exporter - Salvage Yard - Repair Shop ATvalue Automation System - Gas Station - Consignment Service Deliver cars from those who wish - Lodging Service to export used cars (individuals/companies) - Food Service - Convenience Store Scan license plate – send export information - Car Wash - Loader Inspect vehicles/check results Yard for Export Cars - Used Parts Shop - Car Articles Shop - Tire Exclusive Shop Buyer matching - Wheel Exclusive Shop - Tinting Exclusive Shop Remittance of Payment / Notification of Expected Returns - Plating and Painting Shop on Purchase - Korea Customs Service Office Loading / Exporting - Gu Office Branch - Post Office - Educational Facilities - New Car Dealer - Used Car Dealer - Entertainment Facilities including screen golf
2. Valuable Business – Development of Export Automation System Complex 2) Development of Export Automation System Complex Conservation of resources and increase of energy efficiency Increasing the efficiency of the export operation through the development of export automation system can conserve the resources that used to have been wasted through complexity of process and increase the energy efficiency. - Saves time and material resources that were consumed from the visit of individuals or companies to various organizations in obtaining required documents to inspection, repair, and scrapping. Gu Office Buyer ATvalue Automated Exporter Korea Customs Logistics Office Center Shipper Export by Existing Exporter ATvalue Export Complex Creation of Jobs and Contribution to Local Economy Creation of jobs in different areas due to the need for manpower following the companies moving into the complex and the system automation. Expansion of start up businesses and employment leading to the increase tax income and the enhancement of the quality of life of the local residents. Activation of local economy through individuals/companies/organization coming in from various regions of the country for the export of used cars.
3. Valuable Business – Integrated Payment System 3) Integrated Payment System Vicarious payment of various bills including fine, seizure/collateral, etc. Payments related with the car such as fine, seizure/collateral shall be made to each of the corresponding organizations, however, ATvalue logistic center pays for all at once. Car Car Corresponding with Organization with Default Default Car Car Corresponding with Organization with Default Default Car Car Corresponding with Organization with Default Default AT value Car Car Corresponding with Organization with Default Default Car with Corresponding Car Organization with Default Default Vicarious payment for all bills Payment of bills for each vehicle at by ATvalue corresponding organization
4. Valuable Business – Green Scrap Service 4) Green Scrap Service Glass Polish UV Guard Glass Diesel Fuel Additive -Cerium -Cerium -Selenium, Lanthanum Increased Recycle Rate of Scrap Cars - Existing car scrapping business has been centering on some valuable parts such as scrap iron, however, the remnants of the scrap car after compression and LCD Screen -Europium, yttrium, cerium refrigerant gas are mostly neglected in the nature. - Possible to increase the scrap car recycle rate which currently remains at 84% due to lack of profitability and technological strength up to 95% by increasing the export Hybrid Nickel-Manganese -Lanthanum of parts and retrieval rate of rare metals through the -Cerium introduction of refined technologies. Hybrid Electric Motor & Electric Motor Catalyst Conversion Device Generator Neodymium Magnet -Cerium, Zirconium -Neodymium, praseodymium, Lanthanum dysprosium, terbium Business Tie-Up with Manufacturers -Setting up a business tie-up on parts export and scrap car with manufacturers that are experiencing conflict between corporate profit and environment protection concerning legal enforcement to derive a way to create profits mutually. -The manufacturer can reduce large scale facilities investment and infrastructure development which require enormous capital compared with the profitability under expectation through the Green Scrap System. 53
4. Valuable Business – Green Scrap Service 4) Green Scrap Service Expansion of the Export of Used Parts and Domestic Consumption Market - Export and sales of reusable parts through thorough inspection and performance test. - Secure market for models that could not be exported due to the shortage of parts. - Expand market through insurance firms – Induce customers through the used parts supply market for high quality used parts costing about half of the price of new parts and the premium reduction policy of insurance firms. Green Scrap Service Membership Program - We signed the membership contract with car scrapping companies Joint Green Scrap Service throughout the nation and are increasing profits by training them to maximize recycle rate. We are also engaged in used parts • Multilingual Parts Shopping Mall exporter/agency business. • Training for Maximizing Recycle Rate • Used Parts Export Agency - Enhancing the service quality of overall scrap car market and increasing profit for car scrapping businesses. - Expansion of direct sales market through the multilingual shopping mall for used parts. Green Scrap Green Scrap Green Scrap Service Service Service Member Member Member Store Store Store 54
02. Business _ Software Development ATvalue Business
1. Software Development 1) Affiliated Research Center Organization of Affiliated Research Center Head Development Team Manager Sw Application Design Developer Developer Established the affiliated research center in February 2012 Authorized by Korea Industrial Technology Association (KOITA) ATvalue engaged in the development of the integrated online export system since 2011 and is accumulating automobile export related techniques and know-hows. The company is developing updates and a variety of products required by service stabilization in the future 56
1. Software Development 1) Affiliated Research Center Title of Patent: A Method of Providing Automobile Export Agency Service Using Reverse Auction Applicant: ATvalue Application No.: 10 – 2011 -0145322 57
1. Software Development 1) Affiliated Research Center Title of Patent: Applied for patent for the Transmission Title of Patent: Applied for patent for the Automatic Calling Holding Advertisement Method for Smart Devices and Its Method for Wireless Mobile Telephone Device and Its System System Applicant: ATvalue Applicant: ATvalue Application No.: 9 – 1999 -000503-9 Application No.: 9 – 1999 -000503-9 58
2. Software Development - Carcok 2) Export Service - Carcok Customer Gu Office Customs Agent Enter initial car Cancel the Vehicle Export Permit information Registration Carcok Service greatly simplified Send to DB (PL, CI) the time and expenses actually consumed during the export of cars Send information to DB through the online service. for the cancellation of Completion of the vehicle registration cancellation of vehicle Enter car information registration Export Permit (Export License) The existing user with export experience as well as the user without the experience can easily Purchase contract Send tax performance report to DB follow the export procedure. Pay price for car Hand over car and export license Completion of taxation process Send information to taxation DB Buyer Tax Accountant Gu Office Sign Contract and Taxation Procedure Report for Export Pay Price Performance 59
2. Software Development - Carcok 3) Automatic Export Document 4) Vehicle Information Inquiry Technology Preparation Technology Real time inquiry of vehicle information in connection with public institutions (National Tax Service, THE Ministry of Land, Transport and Maritime Affairs, Korea Customs Service) and partners (Korea insurance development institute) Select the inquiry category and enter vehicle number >> Enter basic information of the vehicle Check the accident history immediately *Carcok‟s inquiry service is available 24 hours unlike the inquiry system of other companies and it also involves very simple Automatically prepares all documents information inquiry procedure. required for export 60
2. Software Development - Carcok 5) Real Time Auction 6) Mobile Service Register Car for List Up Auction Auction Items Bidding Seller and bidders Provides the service which equally enables all functions of can easily join the Carcok Service on mobile device (smartphone) auction through web or mobile *Enabled Korea‟s first export related mobile service environment.
2. Software Development - Carcok 7) Document Transfer Step 1 Save within Step 2 Send Required Document Documents Sends the export related documents saved to personal information storage Business Operator Related Export Related Documents Documents (Cancellation Certificate, to the selected receiver through fax or (Seal, Transcript, Business Export License, CI, PL) e-mail using My Documents feature of Registration) the App 8) Automatic Recognition of License Plate Photograph the license plate License No: xxGA 1234 Inquiry Recognizes the license plate photographed Model: K7 Service Maker: KIA Auction with a smartphone, inquires the original Service register of the vehicle, the accident Export Service history, business registration, sales price Inquire trend, and vehicle data in real time. Market Select the service you need Price
2. Software Development - Brocolring 1) Introduction Brocolring The user can watch the advertisement while the user makes a call or receives a call to collect mileage point that can be used to pay for communication bills, goods or services provided by partner companies. Plays advertisements customized to the location, time, age, and 통화를 연결합니다 individual characteristics to provide the information suitable to the user YES NO and enhance advertisement effect. Watch Collect Use Send Receive Mileage AD Points Points Watch AD Again • If the user places the phone to the ear or is not watching the AD while making a call, the user will not receive the notice for reception. • When the receiver presses the Call button, he or she will be given the notice that the caller is watching the advertisement, and when he or she brings the phone to the ear, the proximity sensor will enable the call *Title of Patent: Applied for patent for the Transmission Holding Advertisement Method for Smart Devices and Its System (10-2012-0050818)
2. Software Development - Brocolring 1) Introduction Collecting and Using Mileage Points Using the points provided while watching advertisement, the user can pay for communication bills and goods and services of partner companies, or other services such as PRECALL*. Collect Points Convert Points Use Points
2. Software Development - Brocolring 1) Introduction Development Background _ Mobile advertisement market is recording steady growth every year due to the increase of smartphone users in Korea 26 Million Status of Smartphone Users in Korea 23 Million 20 Million 18 Million 15 Million 11 Million *Source: Korea Broadcasting Corporation, Korea Communications Commission, 7 Million TN SRI Regular Survey/ Google 2.4 Million 4 Million 1.4 Million 800,000 420,000 Sept. Dec. Mar. Jun. Sept. Dec. Mar. Jun. Sept. Dec. Mar. Jun. 2009 2009 2010 2010 2009 2010 2011 2011 2011 2011 2012 2012 Plan to increase mobile advertisement by domestic advertiser in 2012 560 Billion Size of Domestic Mobile Advertisement Market Decrease of Budget 435 Billion 19% Undefined 4% 336 Billion 199 Billion 274 Billion 174 Billion Unchanged Increase of Budget 25% 52% 2007 2008 2009 2010 2011 2012
2. Software Development - Brocolring 1) Introduction Development Background _ Change in the communication market from 3G to 4G will be changed from existing banner and image oriented mobile advertisement to real time video Change in Share of LTE LTE Digital WCDMA 2011 120 1,377 3,813 2012 1,598 728 3,228 2013 2,894 245 2,659 2014 4,232 245 1,321 1,000 2,000 3,000 4,000 5,000 6,000 (10,000 People) Change in Communication Technology by Generation Real Time Video Advertisement Division 1G 2G 3G 4G Advent of more effective advertisement due to the Technology Analogue Digital WCDMA LTE advancement of communication technology Transmission 10kbps ~100 ~600 ~64kbps Speed or Less mbps mbps Voice, Voice, Text, Service Voice Multimedia Text mms, Internet
2. Software Development - Brocolring 1) Introduction Combination of Mvoip (Mobile Internet Phone) and Brocolring It is expected that the number of ordinary call will decrease and the data communication will increase due to the stabilization of LTE network Effective profit model making best out of the changes in the communication market Commercialization of Mvoip Potential of Real Time Video AD by Advancement of Technology as the new mobile advertisement media Call for free and collect points brocolring
2. Software Development - Brocolring 2) Commercialization Plan System of brocolring Brocolring business is comprised of the developer, partners (distributor, mileage point accepting companies), user, advertisement agency, and advertiser, and each of them play their roles individually Partner (Distributor) Developer •Distribution of App •Development, maintenance, and repair of App •Secure users •Management of web and mobile •Advertisement site •Development of additional product and services User Advertisement Agency •View advertisement •Induction of advertiser •Production and organization of •Use of points advertisement •Recommendation of user •Advertisement Partner (Point) Advertiser •Provide the place to use •Provision of advertisement points rates •Point conversion and recognition system
2. Software Development - Brocolring 2) Commercialization Plan Composition of Entire Business Structure Brocolring Share BroColRing Distribution advertisement Contract profit Distribution of Advertisement Advertisement Advertiser sales/production Profit Direct distribution Distribution Send advertisement Advertisement Partner Provide points Agency Advertiser -Mvoip Company (Existing) -New Company in the Market Distribute Brocolring Install partner App Advertiser User Use of Point Communication Communication Point Company Charge/Partner Partner Purchase of Goods, etc.
2. Software Development - Brocolring 2) Commercialization Plan 1 Strategic Business Tie-Up • Reduction of initial expenses for App advertisement and distribution • Requires public confidence for inducing large advertiser • Possibility of inducing partner’s users and potential customers Conditions in Selecting Partner Role of Developer Developing the business structure to establish the Win-Win relationship with the partner preparing to expand existing business and tap into the new market along with the commercialization of Mvoip market Ex) Setting up a business tie-up with My People (DAUM) which maintains 20 million users in the existing Mvoip market will enable the induction of existing users and facilitate the induction of large advertiser and new users based on brand awareness.
2. Software Development - Brocolring 2) Commercialization Plan 2 Tie-up with Advertisement Agency • Receive order for large advertisement through the tie-up with advertisement agency and create profits stably • Receive orders for advertisement and reduces operating expenses of the advertiser • Organize advertisement customized for the target (location, sex, and age, etc.) Pay for Advertising Pay for Advertising Expenses Expenses Manufacture Advertisement Organize Advertisement Advertiser Advertisement Agency Developer Request for Advertisement Distribution of Profit Register App
2. Software Development - Brocolring 2) Commercialization Plan 3 Partnership for the Usage of Point • Set up a business tie-up with the companies that accepts the points that the user collected • Developing a number of ways to use the points is connected to the increase of users • Advance payment with the point gives advantages in the negotiation with partners for contracts and provides more benefits to users. Pay for communication bill (Partnership with mobile communication provider) - The user can automatically pay for the communication bill with the collected points every monthly - The developer pays the mobile communication provider for the settled amount *Need to develop a payment system in connection with the bank Use as mileage point (Partnership with corresponding company) - Provide a number of companies that accept points
2. Software Development - Brocolring 2) Commercialization Plan PUSH Strategy – Maximum exposure to user and potential user Exposure of Advertiser in Partner Sites _ Maximize advertisement effect through the exposure in mutual web sites Related Key Word AD _ Expose App name when searching partners and related key words App Market Distribution _ Android market / App store Overture Marketing _ Expose the search of mvoip related key word on the top Noise Marketing _ Compare features and advantages compared with App Star Marketing _ Use the image of celebrities that users are familiar with Push message _ Banner type advertisement in portal sites and IT related sites Viral Marketing _ Provide App guide and information about benefits through blogs, internet Knowledge database, and online club sites
2. Software Development - Brocolring 2) Commercialization Plan Pull Strategy – Induce users by maximizing the advantages of the App in addition to the provision of mileage points Simplification of Use _ Simplification of the input of personal information required for login and the use of mileage points Membership Benefits _ Provision of mileage points to subscribers and recommenders when a member joins directly or through the recommender Character Product _ Addition of a variety of avatars and icons that add fun to use Gift Shop _ Enabled the exchange of gifts and coupons between users Event _ Events and gimmicks for the promotion of App Integration with Game _ Expose advertisement inside the game to enhance the concentration to advertisement and provide additional mileage points to the user Development of Additional Services and Related Products _ Provision of a variety of differentiated contents competitive with other contents *PRECALL_ Additional function for user convenience *PRECALL: Inquires whether the receiver is available for a phone call through a message before making a call, automatically makes a call when the receiver is available
Car Supply in Asian Region ATvalue Business Plan
Car Supply in Asian Region ATvalue Business Plan • Business Goal – Increase car supply in Asian region to increase the use of Asian Highway and land route and contribute to the advancement of tourism and logistics industry. • Background – According to the economic circumstances of most countries in Asia, it is difficult to purchase luxurious cars produced in Europe and America that the progresses in the car market is small. – The car demand in Asian region is increasing but the supply is not smooth due to insufficient investment into infrastructures such as the local manufacturing facilities and repairing facilities. – Roads such as Asian Highway are being developed, but the number of car owners is small that the utilization rate is low.
Car Supply in Asian Region ATvalue Business Plan Plan the business suitable for the circumstances of each region by connecting with major hub points of the Asian Highway Target Areas – 6 Countries including Russia, Myanmar, Vietnam, Philippines, Kazakhstan, Tajikistan Local Distribution Complex of ATvalue in Each Country ATvalue Export Complex Establishment of Main Offices and Infrastructures in Corresponding Countries for the Sales of Used and New Cars / Rent-a-Car / Car Lease Businesses Asian Highway Branches in Each Country/Car Sales, Rent, Rep air, and Transportation
Car Supply in Asian Region ATvalue Business Plan AH1: Area with warm climate and advanced tourism and leisure industries  Suitable for rent-a- AH6 car business. AH6: Runs throughout Russia, suitable for businesses based on the export of used cars than tourism and leisure AH1 industries due to climatic conditions
Car Supply in Asian Region ATvalue Business Plan ATvalue Business • Export of Korean used cars → Local corporation Car Export • Apply the competitive car supply system designed for higher profit to local market ATvalue • Export to local corporation with the margin rate of 10% (Korea Overseas) • 9/109(≒8.25%) of the purchase price returned due to the deduction of tax for the purchase of used cars • Local corporation, imports cars from ATvalue • Sell in the local market with 30%~100% margin on the import price (including tariff) Local Car Sales • Share profit by 50% with the head office of ATvalue Local Corporation • Operate local repair station and follow-up service centers • Increase sales rate through the tie-up with financial/capital firms • Supply of battery refresher Operation of Local Car • ATvalue operates businesses such as rent-a-car or taxi by exporting new cars for business purpose Business • Import with the same margin rate for used cars, and produce 100% of profit through the (Rent-a-Car, business operation in 1 year • Supply 500 new cars (Russia) every 6 months Transportation) • Sell cars operated for 1 year as used car Local Corporations • High profit rate compared with the direct export of used cars
Car Supply in Asian Region ATvalue Business Plan Car Supply and Investment Plan for 6 Asian Nations Unit: 1,000 $ Business Period for Each Country Investment Ratio 80,357 Country January 2013 Russia 47% 37,500 July 2013 Vietnam 17% 13,660 September 2013 Myanmar 10% 8,035 February 2014 Kazakhstan 10% 8,035 July 2014 Tajikistan 8% 6,696 February 2015 Philippines 8% 6,428
Car Supply in Asian Region ATvalue Business Plan Goal for Car Supply in 1 Year in 6 Asian Nations Unit: Cars(1,000,000 won) Applied the Exchange Rate of 1$ = 1,150 won Total Export Goal for the Goal for Total Goal for the from Korea in Export of Cars Export in the Country Export of Remarks Previous Year for Operation Next Year by Used Cars (2011) (New Car) ATvalue Planning to increase the share in domestic car export to Russia up to 20% and the ratio of Korean 29,753 3,500 1,000 4,500 used car in Russia up to 3% as of 2013 --- Expecting Russia the increase of market ratio in Russia due to the (4,712,258) (81,850) (23,740) (105,590) investment to facilities such as follow-up service centers Many construction companies around the world are 10,288 1,150 300 1,450 Vietnam tapping into Vietnamese market, urbanizing many (139,930) (15,680) (6,720) (22,400) regions and also increasing car demands 827 1,200 200 1,400 Began to open automobile market, expecting high Myanmar (18,730) (12,070) (4,040) (16,110) growth rate Wealthy nation among Middle Eastern and Asian 4,880 2,000 200 2,200 Kazakhstan nations, steady demand for expensive cars, export (23,290) (11,200) (4,800) (16,000) increased as the level of Korean used cars elevated 4,804 2,000 100 2,100 Country with low income level, steady increase of Tajikistan (13,460) (5,600) (2,400) (8,000) inexpensive Korean cars 7,486 1,200 100 1,300 Expecting the increase of used car export due to the Philippines (35,389) (5,600) (2,400) (8,000) relaxation of restrictions on car import
Car Supply in Asian Region ATvalue Business Plan ATvalue Automobile Export Car Purchase / Export Procedure
Car Supply in Asian Region ATvalue Business Plan • Send out purchase list to 100,000 databases including new car dealers, used car companies and dealers, individual members, rent-a-car companies, and transportation companies • Carcok (developed by ATvalue) – Auction system ATvalue • Business tie-up with M Parkland, contract for the supply of cars for export with priority. • Business tie-up with eBay – G Market and Auction, contract for the supply of cars for export with Purchase of Cars priority. • Secure vehicles through the contract for supply of aged vehicles with Renault (Secure Cars to Export) Samsung, Chevrolet, Ssangyong Motors, etc. / supply of aged busses with express bus, intra- city, and regular bus companies such as Dongyang Express Bus • Public advertisement marketing through Brocolring ATvalue Export of Cars • Development of vehicle export logistics complex • Automation of export procedure such as Carcok Service and the recognition of license plate (Delivery to Export Logistics Complex) Export Local Corporation Supply of Cars to • Development of import logistics complex in each country (import operation, rent-a-car, used car / new car dealers, repair shop moving into head office) Importing Country • Management of rent-a-car and repair shops located in the border areas of Asian Highway (Delivery to Import • Place vehicles to public institutions, transportation company, etc. Logistics Complex in Each Country)
Car Supply in Asian Region ATvalue Business Plan Purchasing and Securing Cars for Export by ATvalue Head Office Infrastructure and DB Sales Representative for New Cars ATvalue DB Rent-a-Car Companies and Rent-a-Car Companies Hyundai, Kia, Ssangyong around the Country , GM, etc. 1,027 22,215 Dealers Used Car Sellers Transportation 3,450 Sellers / 25,031 Companies Dealers 10,098 Companies Individuals List of Members + DB 38,000 84
Car Supply in Asian Region ATvalue Business Plan Purchasing and Securing Cars for Export by ATvalue Head Office Infrastructure and DB Most exporters are having difficulties in supplying cars to export due to the worldwide increase of demand for Korean used cars, however, ATvalue has the infrastructure and the database for car suppliers developed through many years and is capable supply cars steadily. New Car Dealers 22,215 Dealers including Hyundai, KIA, Ssangyong, GM, etc. Used Car Companies / Dealers 3,450 Trading Companies / 25,031 Dealers Individuals List of Members + DB 38,000 people Rent-a-Car Companies Rent-a-Car Companies Nationwide: 1,027Companies Transportation Companies 10,098 Companies We have purchase dealers with excellent sales capacity and skills for thorough analysis and inspection about the problems that may take place in the future due to the condition of the car to bring maximum profits. 85
Car Supply in Asian Region ATvalue Business Plan Purchasing and Securing Cars to Export by ATvalue Online/Mobile Real Time Auction ■ Reverse Auction System – The head office directly secures items based on the database of the auction list Bid for Used Cars 86
Car Supply in Asian Region ATvalue Business Plan Purchasing and Securing Cars to Export by ATvalue Business-Tie up for Supply of Cars 1. We established the business tie-up with Carsdaq which Sell Cars to Export exclusively handles the trade of used cars in Gmarket, the Korean branch of eBay, the world‟s largest online shopping mall and we opened Atvalue‟s own exclusive page for the purchase of export cars and introduced the matching system that preferably receives the information about export cars, making it possible to secure a large number of cars. 2. We established business tie-up with (MPark) Land, the biggest used car trade complex in Korea to have 15,000 cars supplied with priority. 3. We also established business tie-up with Renault Samsung, Chevrolet, and Ssangyong Motors to have the supply of 2,000~3000 aged cars each month. 4. We also have contract with express bus, intra-city bus, and other bus companies such as Dongyang Express Bus to have the supply of 50~100 aged busses each month.
Car Supply in Asian Region ATvalue Business Plan ATvalue Export Procedure Once the car is delivered to ATvalue Logistics Center, all data are collected and export related procedures will be automatically progressed. Designed to help the user to easily export cars without sophisticated knowledge and experience about exporting used cars. The user only needs to bring the car and approve the export. With the delivery, the export related documents will be prepared automatically through the scanning of the license plate, and all related processes such as the preparation for export from the confirmation of fine payment status to the inspection of car condition and repair, as well as the contract with buyer and shippers will be automatically completed. 88
Car Supply in Asian Region ATvalue Business Plan ATvalue Export Procedure Conservation of resources and increase of energy efficiency Increasing the efficiency of the export operation through the development of export automation system can conserve the resources that used to have been wasted through complexity of process and increase the energy efficiency. - Saves time and material resources that were consumed from the visit of individuals or companies to various organizations in obtaining required documents to inspection, repair, and scrapping. Gu Gu Office Office Buyer ATvalue Automated Exporter Korea Customs Logistics Office Center Shipper Export by Existing Exporter ATvalue Export Complex Creation of Jobs and Contribution to Local Economy Creation of jobs in different areas due to the need for manpower following the companies moving into the complex and the system automation. Expansion of start up businesses and employment leading to the increase tax income and the enhancement of the quality of life of the local residents. Activation of local economy through individuals/companies/organization coming in from various regions of the country for the export of used cars.
Car Supply in Asian Region ATvalue Business Plan ATvalue Export Procedure Example of Complex ATvalue Automation System Deliver cars from those who wish to export used cars (individuals/companies) Yard for Export Car Scan license plate – send export information Inspect vehicles/check ※ This is the image produced based on the assumption results that the head office purchases and prepares the site for lease business. If the site is rented, only the most Buyer matching required companies will be accommodated. Remittance of Payment / Notification of Expected Returns on Purchase Loading / Exporting Entrance of Car
Car Supply in Asian Region ATvalue Business Plan ATvalue Export Procedure 1. Development of Export Logistics Complex Site Area: 495,867m2 If land is rented, 1.5 billion won a month / 18 billion won a year will be required. (Rent for each pyeong (3.3m2: 10,000 won) For purchase of land, 5,00 billion won will be required (construction cost not included). Site Location: Songdo, Incheon Prospective Tenant Companies - Exporter- Salvage Yard- Repair Shop- Gas Station- Consignment Service - Lodging Service- Food Service- Convenience Store- Car Wash - Loader- Used Parts Shop- Car Articles Shop- Tire Exclusive Shop- Wheel Exclusive Shop - Tinting Exclusive Shop- Plating and Painting Shop- Korea Customs Service Office- Gu Office Branch- Post Office - Educational Facilities- New Car Dealer- Used Car Dealer- Entertainment Facilities including screen golf ※ This is the image produced based on the assumption that the head office purchases and prepares the site for lease business. If the site is rented, only the most required companies will be accommodated. ※ The cash flow and income and expenditure analysis data in this proposal were prepared based on the assumption that the site will be rented. ※ Can be accommodated based on separate financing with the Korea Development Bank, KDB Capital, Hana Capital, etc.
Car Supply in Asian Region ATvalue Business Plan Used Car Trade Business System of Local Corporation • Establishment of Local Used Car Trade Corporation (Different corporate characteristics and profit distribution depending on the terms of establishment in each country) ATvalue Export Cars Ex.) Price for purchase of cars in 10% Profit compared with ~200% tax (different in Korea 2,0700,000 won each country) compared the purchase price with import priceEx.) Car Ex.) Export Price 23,000,000 import tax 4,600,000 won won Russia, fixed tax for each model Local Corporation Import Cars ~100% Profit compared with the purchase price Ex.) Sales price (46,000,000 won) Local Sales
Car Supply in Asian Region ATvalue Business Plan ATvalue Car Operation Business Rent-a-Car, Transportation
Car Supply in Asian Region ATvalue Business Plan Car Operation Business • Transportation Business • Supply vehicles to public institutions or establish and operate a transportation company depending on the circumstances of the county. • Establish a transportation company and export and use ATvalue„s cars. • Rent-a-Car Business • Establish AH(Asian Highway) Rent-a-Car Companies: Open rent-a-car agencies near the national borders of the Asian Highway and other hotspots • Operate agencies with ancillary facilities in the beginning and end of the Asian Highway in each country and the area with high demand for rent-a-car to enhance convenience for road users and business efficiency.  Sell after 1 Year – For both rent-a-car and transportation businesses, sell cars operated for 1 year as used cars to create high profits compared with the export of Korean used cars.  Tap into the market aggressively and form a local automobile market infrastructure following the increase of local traffic and highways
Car Supply in Asian Region ATvalue Business Plan Car Operation Business Flow Purchase / Profit from the Export of New Cars Export of New Cars 10% profit rate compared with domestic purchase Import of New Cars / Operate in Rent- Operating Profit a-Car and Taxi 100% of annual income rate compared to the Businesses import price of the vehicle (including tax) Operate for 1 Profit from the sales of operated cars Year and Sell as Used Cars 60% of the market price of used cars
Car Supply in Asian Region ATvalue Business Plan Comparison of Profit from Car Operating Business and Profit from Export of Used Cars Increased profit rate from exporting and operating new cars in local area Ex.) Comparison of the Export Sales of Used Cars and the Operation of New Cars by Russia Grand Starex Unit: $ Purchase Price of Cars Operating ATvalue Sales Price of Total Income ATvalue Car ATvalue Car Deduction of by Local Income of Business Operating Cars by Local of Local Purchase Price Export Price Input Tax Corporation Local Profit Corporation Corporation (Including Corporation Tax) Export Price- 100% of the Operating Sell Operated 10% profit from 9/109 of Purchase Price + Import Price of Income + Sales Cars at 60% of purchase price purchase price Deduction of Cars through Price – Purchase the Market Price Input Tax Operation Price Export of 18,482 20,535 1,526 3,580 24,643 0 35,714 11,071 Used Cars Car Operation 20,089 22,321 0 22,321 28,571 28,571 21,428 21,428 Business (New Cars)
Car Supply in Asian Region ATvalue Business Plan Purchasing and Securing Cars Exported by ATvalue Business Consultation with New Car Makers about Supply of Vehicles Through the cooperation for the supply of new cars manufactured in Korea (Hyundai, Kia, Ssangyong, etc.), ATvalue is exporting and supplying vehicles to the areas that the manufacture has not set up conditions for sales and manufacturer is expanding their domain of sales. Marketing through the Advertisement Solution Developed by the Affiliated Research Center Increase the collection rate for exportable vehicles owned by individuals and reduce marketing expenses Hyundai Motors Sales Subsidiaries ATvalue through the nationwide advertisement using Brocolring, the application developed by the affiliated research center.
Car Supply in Asian Region ATvalue Business Plan Local Car Supply Various business plans for smooth supply of exported cars
Car Supply in Asian Region ATvalue Business Plan Local Car Supply Channel Import Car Warehouse in Car Logistic Complex in Each Country Complete import procedures within the logistic complex and distribute cars for each business Used Car Transportat State Car Leasing Trading ion Institution/ Company Company Company Company Complete import procedures within the logistic complex and distribute cars for each business
03. Used Car Export Business and Investment Plan Scale of Car Supply and Operating Business for the 1st Year ATvalue (Unit: 1,000 $) Investment Scale Business Export Scale Export Value Total Income (Annual) Used Car Export 65,714 312,500 73,057 7,321 Rent-a-Car 9,464 44,642 10,625 1,160 Taxi Business 9,464 44,642 10,625 1,160 84,821 401,785 94,482 9,642 Russian Corporation (Unit: 1,000 $) Operating Business Import Import Value Sales Total Income Income Used Car Export 312,500 73,035 78,660 5,625 Rent-a-Car 44,642 10,625 11,696 9,196 10,267 Taxi Business 44,642 10,625 11,696 9,196 10,267 401,785 98,482 23,392 102,946 26,160
Car Supply in Asian Region ATvalue Business Plan Local Car Supply Business Installment Sales Service in Connection with Financial Circles • The income level of most Asian countries is not high  Expand the chance to own a car for the general public who does not have enough money to purchase a car by introducing the installment sales system in connection with financial institutions. • Financial institutions can secure safety for local business by providing loans on the car, the security in kind. • The money from car sales will be provided to head office as a lump sum payment from the financial institution. • Currently, we established business tie-up with KDB Capital Corp., Hana Capital, and Hyundai Capital and are providing the service.
Car Supply in Asian Region ATvalue Business Plan Local Car Supply Business Repair Service • Help the smooth circulation of automobiles by resolving the follow-up service issues of the domestic export car market and seek for long-term business development by enhancing user satisfaction. • Set up shops near major hotspots and Asian Highway. • For new cars, the manufacturer provides the infrastructures that it is easy to set up the shop. • Space rented by repair shops: 330m2 area. Expansion of Auto Parts Market • Enhance the satisfaction of buyers and expand market by eliminating the disadvantages of domestic car export business, the parts supply and follow-up service. • Increase the sales ratio of Korean used cars and seek for a way to diversify the models that can be exported for a long term by exporting the parts of used cars and expanding supply network. • Open online shopping mall for domestic used parts in the future in many languages to facilitate the import from any country.
Strong pole Cut saw Air compressor Lever block Paint dryer alignment Tire desorption Plate jack Break oil changer machine Air conditioner Air pump Wheel balance refrigerants changer Air conditioner Plate hammer press vacuum pump Plate base Tire auto air injector Mission oil changer Panel safer Oil drain Power oil changer Air operated grease Molding clipper Drum/disk grinder pump
Machinist Peen Moving tool box Oil filter wrench Hammer Soft Hammer Mobile Floor Crane Pressure gauge Wrench Set Trans mission jack Timing light Socket wrench Jack Tab & die set Socket Spray gun Recoil tab Undercoating. chain pipe wrench Engine holder Sticker remover Antifreeze changer Break pad changer Welding machine Monitor type Torque wrench Auto clamp bore scope
Dust collector Steam car cleaner Hot fan Cam shaft timing tool Bearing puller Component cleaner Engine flushing Wheel dolly Gear oil injector Battery charger
Car Supply in Asian Region ATvalue Business Plan Local Car Supply Business Other Services • Eliminate customer inconveniences such as the climatic issues and discharge issues of the battery, the expendable part, by supplying the battery refresher parts to secure competitiveness. (The battery refresher is mounted to the existing battery to extend life and maintain the best charged/discharged status, exclusively supplied by ATvalue) • Mounted to cars exported and supplied to all regions in order to cope with cold regions on AH6 route and to extend the life of the battery.
03. Used Car Export Business and Investment Plan Local Automobile Supply Business Estimated Sales and Profit/Loss (ATvalue) Unit: 1,000 $ 1st Year 2nd Year 3rd Year 4th Year 5th Year Division Total (2013) (2014) (2015) (2016) (2017) Sales 98,515 103,538 107,904 114,330 123,374 547,661 Sales Cost 84,849 87,851 91,761 97,513 104,758 466,734 Sales Management 7,111 7,741 8,506 9,343 10,258 42,961 Expenses Ordinary Income 6,554 7,944 7,636 7,472 8,356 37,965 Ordinary Income After 6,554 30,624 36,732 37,867 40,417 152,195 Distribution Ratio of Ordinary Income 7% 30% 34% 33% 33% 7% After Distribution Estimated Sales and Profit/Loss (Russia) Unit: 1,000 $ st nd rd th th 1 Year 2 Year 3 Year 4 Year 5 Year Division Total (2013) (2014) (2015) (2016) (2017) Sales 92,400 144,864 153,401 159,317 165,233 715,218 Sales Cost 95,758 99,375 103,158 107,126 111,302 516,722 Sales Management 2,800 3,602 3,927 4,213 4,491 19,035 Expenses Ordinary Income -6,158 41,885 46,315 47,977 49,440 179,460 Ordinary Income After -6,158 24,022 23,158 23,989 24,720 89,730 Distribution Ratio of Ordinary Income -7% 17% 15% 15% 15% 13% After Distribution
04. Investment Proposal ATvalue Business
04. Investment Proposal 1. Investment Request: 8,035,714 $ 2. Purpose of Fund Myanmarese Usage ATvalue Head Office Russian Corporation Total Corporation Investment to the Investment to the Investment to the Purpose Export of Used Cars Export of Used Cars Export of Used Cars Amount 35,714,285 $ 37,500,000 $ 7,142,857 $ 8,035,714 $ Investment Period September 2012 September 2012 December 2012 3. Major Conditions - 8,035,714 $ to the head office of ATvalue - ATvalue invests 50% to Russian and Myanmarese corporations, respectively (condition: 50% of profit) - The profit of head office and the profit of local corporations will be shared with investors (ratio can be adjusted)
04. Investment Proposal 4. Profit Structure (1) Profit and Loss according to Head Office Export (1st Year) Unit: 1,000 $ Division Income Expenditure Profit and Loss (1st Year) Profit and Loss (2nd Year) Used Car Export 73,080 Used Car Purchase Export of Cars for Lease 65,772 Used Car Area 7,308 Export of 211,964 New Car Purchase for Lease Lease Area 2,119 Used Cars Purchase Tax Deduction 19,076 Other ▲4,166 4,238 Other Expenses/Taxes 8,422 Accumulated Current Net Total 98,515 93,271 5,243 Income 29,742 (2) Distribution of Profit based on the Operation of Local Corporations Unit: 1,000 $ Profit and Loss Profit and Loss Division Income Expenditure Dividend (1st Year) (2nd Year) Used Car Purchase 72,346 Used Car Area 6,397 Used Car Area 27,573 Used Car Sales 78,743 Rent Car Purchase 11,706 Rent Car Area ▲4,877 Rent Car Area 8,958 Russian Used Car Operation 6,828 Taxi Purchase 11,706 Taxi Area ▲4,877 Taxi Area 8,958 Corporation Taxis Operation 6,828 Other Expenses / Taxes Other ▲2,800 Other ▲8,961 2,800 92,400 98,558 ▲ 6,158 36,527 17,863 Used Car Purchase 16,399 Used Car Area 2,906 Used Car Area 4,904 Used Car Sales 19,305 Rent Car Purchase 2,795 Rent Car Area ▲ 1,165 Rent Car Area 2,885 Myanmarese Used Car Operation 1,630 Taxi Purchase 2,795 Taxi Area ▲ 1,165 Taxi Area 2,885 Corporation Taxi Operation 1,630 Other Expenses / Other ▲ 769 Other ▲ 2,297 Taxes ▲ 769 22,566 23,767 ▲ 192 8,378 4,815 114,967 134,153 ▲ 6,350 44,906 22,679
04. Investment Proposal 5. Profit Structure for 5 Years - 136.4 billion won profit in 5 years with 90 billion won investment (Earnings Rate: 51.6%) Unit: 1,000 $ Division Investment 1st Year 2nd Year 3rd Year 4th Year 5th Year Total Operating ATvalue 35,714 6,554 7,945 7,636 7,472 8,356 37,965 Income Russia 37,500 17,863 23,158 23,989 24,720 89,728 Dividend Myanmar 7,142 4,815 5,937 6,406 7,341 24,500 Dividend Total 80,357 6,554 30,624 36,732 37,867 40,417 152,195 Deduction of 1,310 6,125 7,346 7,573 8,083 30,439 Corporate Tax Current Net 5,243 24,499 29,385 30,294 32,333 121,756 Income 6. Analysis of Investment Earnings Rate Unit: 1,000 $ Division ATvalue Russia Myanmar Total (1) Payback Period 5.71 Years 3.52 Years 2.91 Years 3.70 Years (2) Current Net Value (8%) ▲10,755 9,061 5,394 12,132 (3) Internal Rate of Return ▲5.04% 15.10% 28.15% 12.99% *The major reason the low profit of the head office is the rent for the land secured for exportation.
Professional automobile exporter! Future leading figure in the world market! ATvalue Co., Ltd.
Value Innovation Relationship Innovation Trading Innovation Competence Innovation Provide the best value to Build trust of all interested Aim at customer-oriented Establish the best global customers parties export structure competence

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AT-AsianHighway

  • 1.
  • 2.
    Table of 1 Introduction Contents 1. Overview 4. S/W Development 1. Affiliated Research Center / 2. History Organization 3. Board of Directors and Shareholders 2. Patents 4. Organization 3. Research Outcomes 1. Carcok Service 2. Visual Caller Ring 2 3 Business Car Supply in Asian Region ATvalue Business 1. Export of Used Cars Plan 1. Export of Used Cars Purchasing and Securing Cars for Export 2. Used Car Export Flow by ATvalue 3. Business Strategy ATvalue Export Procedure Local Automobile Supply Business 2. Export of New Cars Estimated Capital and Procurement Plan 1. New Car Export Market Estimated Sales and Profit/Loss 2. Business Flow 4 3. Business Strategy Investment Proposal 3. Valuable Business 1. Educational Business 2. Development of Export Automation System Complex 3. Integrated Payment System 4. Green Scrap Service
  • 3.
  • 4.
    1. Overview Company Name ATvalue Co., Ltd Established February 1, 2011 (Incorporated) President Min suk Kim Capital 250,000,000 Won Employees 28 (20 + 8(Specialists Outsourced)) Head Office 194-51, Okryeon-dong, Yeonsu-gu, Incheon, Korea Seoul Office Rm. 505 Haksan Cosmos, 110, Gwangjang-dong, Gwangjin-gu, Seoul, Korea Major Business Export Trade, Overseas Circulation, SW and Web Development, Education 4
  • 5.
    2. History May 2012 Brocoling – Applied for patent for the Automatic Calling Method for Wireless Mobile Telephone Device and Its System 2012 March 2012 Brocoling – Applied for patent for the Transmission Holding Advertisement Method for Smart Devices and Its System March 2012 Venture certificate February 2012 Established affiliated research center February 2012 Officially opened integrated export management system ‘Carcok Service’ January 2012 Trial operation of integrated export management system ‘Carcok Service’ January 2012 Established business tie-up with Korea Insurance Development Institute December 2011 Established business tie-up with YMCA for training for export practices 2011 December 2011 Established business tie-up with Automobile Academy for export practices December 2011 Applied for patent for Carcok Service October 2011 Trial operation of the integrated export management system, ‘One Pass Service’ May 2011 Established Russian corporation, Koreacar.co (Ussuriisk, Уссурийск) April 2011 Concluded an export contract with Stanislav Russia April 2011 Began to develop mobile ‘Carcok Service’ March 2011 Began to develop ‘Carcok Service’, the integrated export management system March 2011 Established a new Development Division in Seoul February 2011 Changed the company name to AT value 2010 Signed an expert contract with Cagayan De Oro (Philippines) 2005 2009 2008 Signed an export contract with Ghana Signed an export contract with Iraq for the new car, Bongo III ~2010 2007 2006 Signed an export contract with Vietnam Signed an export contract with Jordan 2005 Established Samil Trading 5
  • 6.
    3. Board ofDirectors and Shareholders Profile of Executives CEO Ji ho Yang •Kookmin Bank •Hanshin Inc. •Grand Industrial Development •Directly and indirectly supervised the establishment of various incubating companies and managed their operations •C.E.O of Seoul Biz Base •C.E.O. of Hanwon Motors •Managed KIH Kookmin Venture Fund and Seoul Ventures Holdings Company •Consulting for the financial structure of Korea Aerospace Industries (KAI) •Executive director for Doctor for Doctor, KS Music •Investment inducement and M&A for Sejong High Tech, Donga Precision Machinery, Samju Mulsan, Hanrim ST, Hyundai Machinery, etc. •Lecture on management, investment, and corporate M&A at various universities •Lecture on start-up business consulting 6
  • 7.
    3. Board ofDirectors and Shareholders Profile of Executives COO Min suk Kim •Korea Finance Security: The company is in charge of transporting cash to 12 banks in Korea, builds and retains clients through efficient online marketing system. : Kookmin, Hana, Cheil, Shinhan, Woori, Exchange, City, etc. •NOW I&S: Online movie ticketing service provider, provides online marketing and KTF services • Ace Real Estate Consulting: Developed a system which systematically manage the establishment of committees, management of members by district, calculation of price of right, and information on the allocation of apartment by size for nationwide redevelopment and reconstruction promotion committee and association •Samil Real Estate Corporation: Developed programs for the calculation of the price of right of redevelopment association members and for promoting integrated marketing, analyzing and designing margins for new construction project. Developed and managed websites for 100 designated member stores •Samkyung C&M: www.jtech.co.kr, Established the network marketing system for redevelopment and reconstruction through on/offline training, books, blogs, and online club sites • Arcade Construction (C.E.O): Construction through the development of www.arcadecon.co.kr site, analysis of profit feasibility, construction of urban lifestyle residence, one room, multiplex house, and townhouses through PM or CM • ATvalue (C.O.O.): Concluded export contracts with various countries around the world, training of individuals on starting used car export business, and developed and applied for patent for Carcok Service which systematized the existing used car export process 7
  • 8.
    3. Board ofDirectors and Shareholders Profile of Executives CTO Yeong mo Yoo January 1996 ~ December 2000 Hyundai Motors Overseas Division March 2001 ~ January 2005 Hyundai Motors Middle East Division March 2005 ~ January 2010 C.E.O. of Samil Trading February 2011 ~ Present ATvalue 8
  • 9.
    3. Board ofDirectors and Shareholders Profile of Executives CSO Yeong jin Yoo •Homano Trading Management Support Team •Established Samil Trading •Samil Trading Used Car Export Devision •Joeun C&D Used Car Export Division (Exclusively for Russia) •Present: ATvalue Export Division Manager (Overseas Sales) •Present: YMCA and Automobile Academy instructor for export practices 9
  • 10.
    3. Board ofDirectors and Shareholders Profile of Executives CMO Won ho Jeong January 1995 ~ January 2001 KIA Motors Sales Division April 2001 ~ January 2005 Hansung Motors Sales Team Manager June 2005 ~ January 2007 Auto Parts Seoul Branch Manager May 2007 ~ March 2011 TN Trading Executive Director February 2011 ~ Present ATvalue 10
  • 11.
    3. Board ofDirectors and Shareholders 직원 이력 • PM for North Korean Defector Residence and Settlement Support Head of System of the Ministry of Unification • Developed automobile inspection system for Road Traffic Safety Research Center Authority • Ship clearance system for Korea Coast Guard Yeong seung Lee • Developed agricultural technological information and application system for Rural Development Administration • Developed agricultural technological information DB for Rural Development Administration • Developed H.E Engineering network outsourcing management system • Internet international telephone billing system for Moneyphone • Text and Voice Recognition System for Moneyphone • ARS Public Service Guide System for Gwangyang City Government • Developed electronic approval system for Jeonju City Government • Developed the group ware for Opennet • Hankook Tire Internal Document Circulation System • Developed MRP2 system for Korea Johnson & Johnson • Developed Dr. C compiler at BIT Computer 11
  • 12.
    4. Organization Organization Map CEO COO Management Export Overseas Research Auction Sales and Planning Operation Operation Center Team Division Division Division Division 12
  • 13.
    4. Organization Experience ofStaff _ Export Division Manager Myeong gi Lee Manager Jin ho Seok 12 years of experience 8 years of experience •Manager, Hanmi Auto Service • Shinho Trade, Clerk •Daemyeong Trading, Head of Automobile Division • Sunwoo Motors Repair Team •Present: ATvalue Overseas Distribution Manager(Russia) • Hyundai Glovis Automobile Analysis Team • ADECAR Manager of Auction Division • Present: ATvalue Manager of Overseas Export Division Assistant Manager Hyang jae Kim Manager Deok jae Goh 3 years of experience 10 years of experience • Majored in Arabic Language, Chosun University •Hyundai Auto Service, Repair Team • Eins School, Teacher • SY Trade • Present: ATvalue Overseas Distribution Manager •C.E.O. of Car Max Auto Service (Middle East, Asia) •Present: ATvalue Manager of Overseas Export Division 13
  • 14.
    4. Organization Experience ofStaff _ Export Division Manager Dae hee Park Manager Dae jin Choi 5 years of experience 7 years of experience • Hansung Motors Sales Division • Dongbu Fire Insurance Vehilce Investigation Team • KIA Motors Sales Division • Founder and C.E.O. of Dongjin Trade • Sungeun Trading • Hangil Trading Middle East Division • Autozen Automobile Division • Present: Manager, ATvalue Export Division • Present: Manager, ATvalue Export Division 14
  • 15.
    4. Organization Experience ofStaff _ Affiliated Research Center Team Manager Min woong Jeong Manager Geon yeong Hong Graduated from Dept. of Visual Design, Hongik University • Developed plant management system for National December 2004 Produced the flash animation for Kyobo Life Auditor‟s Arboretum Office July 2005 Designed the brochure and took photographs for the Advanced • Web renewal of economic news for the Ministry of Program for Cultural Contents, Seoul National University Finance and Economy August 2005 Produced the commemorative video for the 30th anniversary of • Developed and managed Hanjin Apartment Sales Site Korea Management Institute • Developed broadcast monitoring and music source December 2005 Oye Hyang Industry homepage design, coding, flash filtering system for SBS January 2006 mineERP homepage design, coding, flash • Developed „Carcok Service‟ of ATvalue February 2006 Apoteke homepage design, coding, flash March 2006 Produced video describing the recruitment for Daum Communication 2006 Hongik University Graduate School of Architecture & Urban Design homepage design April 2007 ~ June 2008 EA Mobile Korea web design, mobile contents design Senior Researcher Gwan gook Kim 2007 Exhibition Video for the Reception of Gutenberg Award (Germany) by Professor Sang soo Ahn 2009 Web design for Sindoh Ricoh Central Branch 2008~2011 Team manager for IT Division of Samkyung C&M • UBIVELOX SE Division • SimpleSync maintenance & repair • Developed the global version of SimpleDrop Researcher Min ji Sohn • Designed and developed NeoSimpleSync •Developed u-City Event Monitoring System (Silver Prize at the Software • Developed SKT RealEdu, educational application Competition 2009 at Baekseok University) •Developed Android based food ordering system •Developed Android based electronic product follow-up service management system •(Grand Prize at the Software Competition 2010 at Baekseok University) 15
  • 16.
    02. Business _Export of Used Cars ATvalue Business
  • 17.
    1. Export ofUsed Cars 1) Export Trade of Used Cars Export Trade Business Overseas Car Distribution Business ■ Export of new and used cars ■ Russia prohibited the import of right-hand drive cars  decreased the demand for Japanese used cars, increased the demand for ■ Forwarding and shoring Korean used cars. ■ Discovery of new buyers and pioneer of emerging market ■ Established the Russian corporation, Koreacar.co, in May 2011, and engaged in used car circulation and sales activities according to local demand. ■ Expanding sales network in the far east Russian region and Major Clients (24 Countries) securing local dealers • Middle East: Iraq, Jordan, UAE, Yemen, Syria • Africa: Sudan, Egypt, Ghana, Nigeria • South America: Costa Rica, Nicaragua, Chile, Paraguay • Asia: Russia, Mongolia, Tajikistan, Kyrgyzstan, Kazakhstan, Uzbekistan, Philippines, Cambodia, Laos, Vietnam 17
  • 18.
    1. Export ofUsed Cars 1) Export Trade of Used Cars 18
  • 19.
    1. Export ofUsed Cars 1) Export Trade of Used Cars Growth of Used Car Export Market Currently, the domestic consumption market for used cars is stagnant due to excessive competition, economic downturn, and increase of oil price. However, the overseas market is stable and also shows high growth potentials in terms profit. Scale of Used Car Export 30 25 20 15 10 5 0 Export Scale 2008 Export Amount 2009 2010 2011 Export Amount ($) Amount: $600 Amount: $1 Amount: $1.25 Amount: $1.53 Export Scale (Quantity) Million Billion Billion Billion Scale: 150,000 Scale: 190,000 Scale: 240,000 Scale: 290,000 Maintains approximately 20% or higher growth rate every year 19
  • 20.
    1. Export ofUsed Cars 2) Growth of Used Car Export Market Economy is Expected to Look up for Sometime with the Export of Used Car at Sokcho Port (Yeonhap News, December 5, 2011) 4,529 used cars were exported to Russia through Sokcho Port in 2011 Increased greatly from 833 cars in 2009 and 1,138 97th Edition of Close Up Industry cars in 2011 (E-Daily, May 23, 2012) View Program ‘Hot’ Response to Korean Used Cars in Overseas… 2009 833 Cars Seeking a Way Out through Export (KBS1, November 17, 2011) View News 2010 1,138 Cars Civil War in Libya Drawing to an End... Used Car 2011 4,529 Cars Export Complex Coming to Life 20 (YTN, August 26, 2011) View News
  • 21.
    1. Export ofUsed Cars 2) Growth of Used Car Export Market Export of Korean Used Cars 2010 2011 2010 2011 Amount Quantity Amount Quantity Amount Quantity Amount Quantity ($1,000) ($1,000) ($1,000) ($1,000) Jordan U.A.E Russian Federation Myanmar Mongolia Nigeria Libya Syria Ghana Israel Laos Afghanistan Chile Sahrawi Arab Democratic Republic Vietnam Peru Kirghizstan Iran Cambodia Vanuatu Philippines Ethiopia Costa Rica Guatemala Kazakhstan Tanzania Thailand Madagascar Tajikistan Dominican Republic Egypt Armenia Sudan Guinea Nicaragua Belarus Iraq Turkmenistan Yemen Tunisia USA Djibouti Uzbekistan Paraguay Pakistan Marshall Islands Cote d'Ivoire Lithuania 116 Others Total 21
  • 22.
    1. Export ofUsed Cars 2) Growth of Used Car Export Market Export of Korean Used Cars to Russia Due to the ban on right-hand drive cars of Russia, the import of Japanese cars is restricted while the preference for Korean cars is increasing. Our export share increased from 2% up to 7%. 2010 2011 Russia 12,168 ($151,667,000) 29,753 ($409,790,000) Major Clients and Export Scale (Top 8 Countries) Unit: $ 1,000 2008 2009 2010 Rank Country Number of Number of Number of Amount Ratio (%) Amount Ratio (%) Amount Ratio (%) Cars Cars Cars 1 Jordan 188,849 54,954 20.5 268,722 52,962 34.7 326,478 74,530 39.1 2 Libya 87,488 18,163 6.8 149,570 32,692 19.3 134,537 26,531 16.1 3 Vietnam 179,682 14,418 5.4 218,318 25,776 28.2 186,960 14,402 22.4 4 Laos 29,794 8,025 3.0 28,677 9,683 3.7 62,730 11,414 7.5 5 Ghana 20,124 13,332 5.0 21,951 9,326 2.8 33,528 11,324 4.0 6 Sudan 36,073 10,892 4.1 45,293 14,014 5.8 40,424 10,168 4.8 7 Philippines 9,415 3,677 1.4 22,973 7,405 2.9 32,298 8,191 3.8 8 Kirgizstan 53,286 27,645 10.3 18,751 8,895 2.4 16,926 6,896 2.0 Total 604,711 151,106 100.0 774,255 160,753 100.0 833,881 163,456 100.0
  • 23.
    1. Export ofUsed Cars 2) Growth of Used Car Export Market Comparison of Domestic Consumption and Export Domestic Item Export Remarks Consumption Purchase of Cars All Types of Cars Cars Preferred in Each Country EX) Russia: 4WD, SUV, Starex, etc. Proportion to Price is determined at a high level compared with Higher than Domestic Market Margin Domestic Market domestic market price due to current production line and Price Price lack of technology 8% of the purchase price is returned in accordance with 8% of Purchase Price is deemed input tax deduction on recycling of scrapped Tax Benefit None Returned materials etc. (Article 108 of the Restriction of Special Taxation Act) Average Period of 1 month ~6 High turn over ratio, low inventory ratio 1 week ~ 1 month Sales months Save on maintenance and management expenses TT: Exported only after the price of the car is paid Follow-up Service Possible Buyer‟s responsibility FOB: Overall risks and burden of expenses are handed over from the seller to buyer
  • 24.
    2. Used CarExport Flow Liability Checklist▶ Insurance Checklist▶ ▶ Step 1 Order from Step 3 Transportation of Step 4 Delivery of Cars to Step 2 Purchase of Cars Overseas Buyers Cars Logistics Center Export contract with AT Purchase cars from Deliver cars to the head Arrival at AT value value’s overseas buyer Carcok Service users office of AT value Logistics Center and member stores (Incheon) and inspection Step 5 Cancellation of Car Step 7 Buyer Car Step 8 Payment of Fees Step 6 Customs Clearance Step 9 Export and Tax Registration Confirmation and Distribution of Profits Gu Office CI PL Request Shipper for Application for Embarkation Payment of Logistic Fees Load cars and export Cancellation of Confirm cars with Customs Agent: Issue Distribute profits to Process post-procedures Registration overseas buyers Export Permit investors (tax) Liability Checklist▶ Insurance ◀ 24
  • 25.
    2. Used CarExport Flow 1) Used Car Export Contract Contract – Buyer Contract ALTERNA (Russia) Asia bus DV (Russia) SMILE (Russia) ROSKOR (Russia) Buyer Business Status 25
  • 26.
    2. Used CarExport Flow 2) Purchase of Cars to Export We send out the purchase list to sellers such as used car trade complex, sales representatives for new cars, rent-a-car companies, transportation companies, and individuals through on/offline purchase marketing network and purchase cars. Sales Representative for New Cars ATvalue DB Rent-a-Car Companies and Rent-a-Car Companies Hyundai, Kia, Ssangyong around the Country , GM, etc. 1,027 22,215 Dealers Used Car Sellers Transportation 3,450 Sellers / 25,031 Companies Dealers 10,098 Companies Individuals List of Members + DB 38,000 26
  • 27.
    2. Used CarExport Flow 2) Purchase of Cars to Export ■ Reverse Auction System – The head office directly secures items based on the database of the auction list Bid for Used Cars 27
  • 28.
    2. Used CarExport Flow 2) Purchase of Cars to Export 1. We established the business tie-up with Carsdaq which exclusively handles the trade of used cars in Sell Cars to Gmarket, the Korean branch of eBay, the world‟s Export largest online shopping mall and we opened Atvalue‟s own exclusive page for the purchase of export cars and introduced the matching system that preferably receives the information about export cars, making it possible to secure a large number of cars. 2. We established business tie-up with (MPark) Land, the biggest used car trade complex in Korea to have 15,000 cars supplied with priority. 3. We also established business tie-up with Renault Samsung, Chevrolet, and Ssangyong Motors to have the supply of 2,000~3000 aged cars each month. 4. We also have contract with express bus, intra-city bus, and other bus companies such as Dongyang Express Bus to have the supply of 50~100 aged busses each month.
  • 29.
    2. Used CarExport Flow 2) Purchase of Cars to Export Document to Prepare Major Procedures 1. Check Car • Sales Contract 2. Check Document 3. Inquiry -Inquire Original (Check for Provision Document Received Seizure, Bonds) -Inquire Business Registration (for business ownership) • Certificate of -Inquire Accident History (for accident) Seal Impression 4. Sign Contract (Pay Price and Take Over) • Vehicle Registration ■ Use of Car Analysis Tool 1. Work on 3 Criteria -500,000 won for popular cars -200,000 won for popular cars (hood, both front -1,000,000 won for regular cars 5. Replacement of hood -300,000 won for regular cars fenders, and front panel) or rear fender -2,000,000~4,000,000 won for luxury cars -2000,000 won or higher 2. Work on both wheel -1,500,000~2,000,000 won for popular cars - 50,000 won deduction on each cut houses, roof, a filler, b -3,000,000~4,000,000 won for regular cars -9 or more cuts: Require full coating filler - Cost varies depending on car price for luxury cars 6. Painting (1) 500,000 won deduction on small cars (2) 700,000 won deduction on medium cars -1,000,000~1,500,000 won for popular cars (3) 1,000,000 won deduction on large cars 3. Single house -1,500,000~2,000,000 won for regular cars - Cost varies depending on car price for luxury cars The analysis tool is used at the purchase -100,000 won for popular cars to appraise the car accurately and maximize profit at the 4. Replacement of doors -100,000 won for regular cars sales stage! -1,000,000 won or higher for luxury cars 29
  • 30.
    2. Used CarExport Flow 3) Consignment and Inspection of Cars Delivery of purchased cars to logistics center. Inspection of car status before consignment, insure car for the loss during consignment process. Document to Prepare Major Procedure • CI(Commercial 1. Prepare CI (Commercial Invoice), PL Invoice) (Packing List) 2. Attach the certificate for the cancellation of vehicle registration to • PL(Packing List) CI and PL and send to the customs agent 3. Issue of export declaration 4) Vehicle Registration Cancellation Procedure Document to Prepare 차량의 국내 등록 말소 Major Procedure • Application for 1. Preparation of documents required for the cancellation of the vehicle the Cancellation registration of Registration -Application for the cancellation of (for Export) registration, invoice • Invoice 2. Submission of documents to the Gu Office -Application for the cancellation of Document Received registration, invoice, vehicle • Certificate for registration, certificate of seal impression, license plate the Cancellation 3. Issue of the Certificate for the of Vehicle Cancellation of Vehicle Registration Registration 30
  • 31.
    2. Used CarExport Flow 5) Customs Clearance Document to Prepare Major Procedure • CI(Commercial 1. Prepare CI (Commercial Invoice), PL Invoice) (Packing List) 2. Attach the certificate for the cancellation of vehicle registration to • PL(Packing List) CI and PL and send to the customs agent 3. Issue of export declaration Document Received • Certificate for Export Declaration 6) Confirmation of Cars by Buyer Major Procedure 1. Confirmation of cars by buyer 2. Compare with vehicle registration (performance inspection table) 3. Hand over vehicle and export permit when there is no trouble 31
  • 32.
    2. Used CarExport Flow 7) Payment Advanced Payment Base Cars are loaded to the ship after the buyer confirms actual cars. Payment is made after confirmation, and then the cars will be handed over. T/T [Telegraphic Transfer Remittance] Transferred to the account designated by the other party through the bank. Since the money is directly sent to the account without requesting the bank for collection, the payment is fast, fees are saved, and the risk in the delay of payment is eliminated. FOB (Free On Board) refers to the trade condition where the seller (exporter) loads the promised cargo to the ship designated by the buyer (importer) and shoulders overall expenses and risks until the cargo is handed over to the importer on the ship. In other words, the burden for overall risks and expenses is transferred from the exporter to the importer when the cargo is loaded to the ship at the export port over the railing on the ship‟s side. Since the buyer takes overall responsibilities after cars are loaded to the ship, the exporter does not take responsibilities for follow-up service, insurance, or loss of cars. 32
  • 33.
    2. Used CarExport Flow 8) Export and Tax Deemed input tax deduction on recycling of scrapped materials etc. (Article 108) In case a collector (ordinary taxable person) of recyclable waste resources and used goods (limited to used cars) acquires such resources or goods from an entity which cannot issue a tax invoice such as the central government, local government, tax-exempted business, persons subjected to simplified taxation, and individuals and manufactures, processes, or supplies them, deem input tax up to a certain rate and deduct it from output tax in order to promote environmental preservation through the efficient collection of waste resources. Acquisition Value x 9/109 -Deduction Rate for Used Car - Applicable Business: Those who registered as automobile sales business in accordance with the Automobile Control Act, those who export used cars - Applicable Items: Used goods – The “used car” according to the Automobile Control Act, however, excluding the cars for which the period between the manufacture date recorded in the original register of the car and the date the declaration of export is received as recorded in the export performance report is less than 1 year in case of exporting used cars. 33
  • 34.
    2. Used CarExport Flow Car Export Simulation Investment: 20 Million Won / Purchase Price for 1 Car: 20 Million Won / Export Price: 21 Million Won (Margin = 1 Million Won) Deduction (Return) of Input Tax for Recyclable Waste Resources: Estimated at 8% / other ancillary charges excluded Deduction Deduction (Return) (Return) of Input Number of Accumulated Investment Margin per Car of Input Tax for Tax for Period Cars Profits Profit Rate (Purchase Price per Car) ⓐ Recyclable Waste Recyclable Waste Purchased (ⓐ+ⓑ) Resources Resources ⓑ 2 Months 20,000,000 1 1,000,000 0.08 1,600,000 2,600,000 13% 4 Months 20,000,000 1 1,000,000 0.08 1,600,000 5,200,000 26% 6 Months 20,000,000 1 1,000,000 0.08 1,600,000 7,800,000 39% 8 Months 20,000,000 1 1,000,000 0.08 1,600,000 10,400,000 52% 10 Months 20,000,000 1 1,000,000 0.08 1,600,000 13,000,000 65% 12 Months 20,000,000 1 1,000,000 0.08 1,600,000 15,600,000 78% 14 Months 20,000,000 1 1,000,000 0.08 1,600,000 18,200,000 91% 16 Months 20,000,000 1 1,000,000 0.08 1,600,000 20,800,000 104% 18 Months 20,000,000 1 1,000,000 0.08 1,600,000 23,400,000 117% 20 Months 20,000,000 1 1,000,000 0.08 1,600,000 26,000,000 130% 22 Months 20,000,000 1 1,000,000 0.08 1,600,000 28,600,000 143% 24 Months 20,000,000 1 1,000,000 0.08 1,600,000 31,200,000 156% total 34
  • 35.
    3. Business Strategy 2. Supplier 1. Manage and Advantage Contract Discover Buyers Used ATvalue Buyer Gain Profits Car Supplier (for Continue Demander exportation) Trade 3. Collect cars 4. Minimize Car and secure smooth supply Loss and Damage 1) Management and Discovery of Buyers More prompt, aggressive, and systematic discovery and management of buyers compared with existing small used car exporters. - We secured dealers fluently speaking the language of the buyer for enhanced sales activities. - We operate meeting facilities and lounge for buyers in export offices. - We provide the information on export volume directly from the shippers leaving to buyer‟s nations to buyers. - We are expanding the trade and export volume from supplier to 1 buyer to B2B trade across borders. 35
  • 36.
    3. Business Strategy 2)Supplier Advantage Market Contract Risk hedge for the cancellation of buyer order - If 10% of contracted price is paid in advance at the contract, goods will be supplied preferably Exemption clause concerning the period for securing cars - There are far more demands than the supply in the current market. for exportation We sign the contract with the advantage to the supplier, and if a buyer breaches the contract terms, we can export the same type of cars to another buyer on the same terms. 36
  • 37.
    3. Business Strategy 3)Minimize Loss during Circulation Process We inspect our cars in each stage and are thoroughly insured in order to minimize loss from the purchase cars to warehousing at the distribution complex and delivery to buyers. 37
  • 38.
    02. Business _Export of New Cars ATvalue Business
  • 39.
    1. New CarExport Market 1) Demand and Supply of Korean Cars (New Cars) - New car exporters springing up everywhere The demand for Korean cars is increasing in the regions without factories of Korean car makers such as Hyundai, KIA, Ssangyong, etc. However, consumers have to wait a long time to purchase new cars through local official importers and a number of small new car exporters are established in Korea for the high profit rate compared with the cars parallel-imported from Korea. However, each manufacturer is limiting the purchase of their cars sold in Korea by individuals or corporations to protect local official importers that the new car exporters are hiring part-time brokers who lend their names for the purchase of new cars. 39
  • 40.
    2. Structure ofNew Car Export Business 2) New Car Export System of ATvalue Order from Overseas Buyers Contract with Overseas Buyers Small quantity based contract regardless of the local Large quantity based contract in the regions without official importer official dealers New Car Exporter Domestic Manufacturer (Agency) Domestic Manufacturer (Head Due to the limitation on the number of Office) purchases, companies are borrowing names of part-time Direct contract with the head offices of Hyundai, KIA, Ssangyong, etc. brokers to buy new cars 40
  • 41.
    2. Business Flow 1)ATvalue New Car Export Flow Supply of Supply of Cars Cars Domestic Overseas Buyer Manufacturer Hyundai, KIA, Ssangyon g, etc. P-Bond 30~40% L/C or TT L/C or TT 41
  • 42.
    3. Business Strategy 1) Car Export Contract Contract – Buyer Contract Contract with Syria for the Supply of 500 Tuscon IX ATvalue concluded the contract with supplier advantage with buyers around the world the company developed through many years of experience in trade based on the market structure where supply is noticeably small compared with the demand. 42
  • 43.
    3. Business Strategy 2) Establishment of Branches Branches help securing local Supply and Business Facilities of Hyundai/KIA cars buyers and steady in the Middle East/Africa/Europe management as well as import/export related Europe Middle East operations. We established 2 branches in the Middle East and 1 branch in Russia including Iraq, Syria, and Jordan considering the relationship with the operating facilities directly managed by Africa manufacturer‟s local branches. Middle East Operation of Follow-up Service Center We are also operating follow-up service centers along with the branches to help local sales by buyers and are planning to increase the number of operating Eastern Europe centers gradually following the sales. 43
  • 44.
    02. Business _Valuable Business ATvalue Business
  • 45.
    1. Valuable Business– Educational Business 1) Educational Business ■ ‘Used Car Export Practice’ course at YMCA and Automobile Academy ■ ‘Used Car Export Practice and Business Registration’ course for Carcok Service members General public who understands the benefit of export, but could not approach export business due to lack of actual experience 01 02 03 Automobile General Public Future Industry Interested Entrepreneurs Workers in Export Future entrepreneurs wishing to start a Has basic knowledge about automobiles, business safely with a small capital persons engaged in related industries with potential to (Supports the entire course from show quick progresses by learning about export beginner to practice) practices 45
  • 46.
    1. Valuable Business- Educational Business 1) Educational Business Fulfilling social function with the training courses related with the export of used cars Job training for workers from multicultural family Display enhanced communication skills by understanding the used car export business in the trade between countries around the world. Job training for workers from multicultural families who can be ignored as cheap-laborer. Training and Application Negotiation with overseas buyers / Customer response / Import dealer for corresponding country Job training for persons with disabilities Provide the opportunity to start a business or to learn in connection with the Korea Employment Promotion Agency for the Disabled under the Ministry of Labor. Organize training programs customized for the skill level of the individuals with disabilities, help finding jobs in export related areas. Training and Application Export administration / Repair and automobile related services 46
  • 47.
    1. Valuable Business- Educational Business 1) Educational Business System of Educational Business Step 1 Step 3 Step 2 Business Tie-Up for Start up Achieve Train Targets Business and Employment Education Goals Korea Employment Multicultural Promotion Agency Local Public Family Support Offices Persons with Center Creation of Jobs Disabilities and and Sharing of Multicultural Composition of Work Education Families Infrastructure Small and Medium Business Administration / Ministry of Support for Business Provide Knowledge Economy Commenc ement ATvalue Trade Training Center Refund Support for the Course of Support for Business Certification Ministry of Future Commencement Labor Successful Start- of Life-Long Entrepreneurs Education up of Business Small Business Ministry of Development Board of Labor Center Education 47
  • 48.
    1. Valuable Business- Educational Business 1) Educational Business Training of Future Entrepreneurs for Used Car Export Business There are no institutes that provide exclusive training on the export of used cars. We transmit our know-how about export procedures and business management to future entrepreneurs, and provide the opportunity to establish independent companies by supporting training fees and the fund for staring a business. Comparison of Staring Export Business and Starting Other Businesses -Initial Investment- BBQ Restaurant Export Business Comparison Coffee Shop (100m2) Remarks (100m2) (660m2) Store Purchase Cost Class B Commercial District Class B Commercial District (Incheon Export Complex) In other forms of business, the store purchase (Deposit) 50,000,000 won 100,000,000 won 3,500,000 won cost increases when the premium is added Membership Fee 10,000,000 won 10,000,000 won None Exhaustible expenses (not refunded) Initial facilities cost which will be eliminated at the Facilities Cost 10,000,000 won closure of business is the most burdensome cost for 40,000,000 won 100,000,000 won (Interior) (Office Setting) those who start the business 20,000,000 won Used car export business can be started with at Fixtures and Cost of Products 20,000,000 won 120,000,000 won (Purchase of Cars) least 5,000,000 won 90,000,000 won~ 300,000,000won Total At least 120,000,000 Won At least 330,000,000 Won 30,000,000 won compared with other forms of businesses -Fixed Monthly Cost - BBQ Restaurant Export Business Comparison Coffee Shop (100m2) Remarks (100m2) (660m2) For other businesses, the rent increases when the Rent 5,000,000 won 7,000,000 won 1,200,000 won premise is located in class A commercial district Labor Costs 10,000,000 won 5,000,000 won 5,000,000 won Miscellaneous Costs 1,200,000 won Electricity, utilities, and other supplies 2,000,000 won 500,000 won expenses Total 17,000,000 won 13,200,000 won 6,700,000 won Approximately 50% of fixed cost compared with other forms of48 businesses
  • 49.
    2. Valuable Business– Development of Export Automation System Complex 2) Development of Export Automation System Complex Automated system for every one to export ATvalue Automation System Once the car is delivered to ATvalue Logistics Center, all data are Deliver cars from those who wish to export collected and export related procedures will be automatically used cars (individuals/companies) progressed. Designed to help the user to easily export cars without sophisticated knowledge and experience about exporting used cars. Scan license plate – send export information The user only needs to bring the car and approve the export. With the delivery, the export related documents will be prepared Inspect vehicles/check results automatically through the scanning of the license plate, and all related processes such as the preparation for export from the confirmation of fine payment status to the inspection of car Buyer matching condition and repair, as well as the contract with buyer and shippers will be automatically completed. Remittance of Payment / Notification of Expected Returns on Purchase Loading / Exporting 49
  • 50.
    2. Valuable Business – Development of Export Automation System Complex 2) Development of Export Automation System Complex Prospective Tenant Example of Complex Companies - Exporter - Salvage Yard - Repair Shop ATvalue Automation System - Gas Station - Consignment Service Deliver cars from those who wish - Lodging Service to export used cars (individuals/companies) - Food Service - Convenience Store Scan license plate – send export information - Car Wash - Loader Inspect vehicles/check results Yard for Export Cars - Used Parts Shop - Car Articles Shop - Tire Exclusive Shop Buyer matching - Wheel Exclusive Shop - Tinting Exclusive Shop Remittance of Payment / Notification of Expected Returns - Plating and Painting Shop on Purchase - Korea Customs Service Office Loading / Exporting - Gu Office Branch - Post Office - Educational Facilities - New Car Dealer - Used Car Dealer - Entertainment Facilities including screen golf
  • 51.
    2. Valuable Business – Development of Export Automation System Complex 2) Development of Export Automation System Complex Conservation of resources and increase of energy efficiency Increasing the efficiency of the export operation through the development of export automation system can conserve the resources that used to have been wasted through complexity of process and increase the energy efficiency. - Saves time and material resources that were consumed from the visit of individuals or companies to various organizations in obtaining required documents to inspection, repair, and scrapping. Gu Office Buyer ATvalue Automated Exporter Korea Customs Logistics Office Center Shipper Export by Existing Exporter ATvalue Export Complex Creation of Jobs and Contribution to Local Economy Creation of jobs in different areas due to the need for manpower following the companies moving into the complex and the system automation. Expansion of start up businesses and employment leading to the increase tax income and the enhancement of the quality of life of the local residents. Activation of local economy through individuals/companies/organization coming in from various regions of the country for the export of used cars.
  • 52.
    3. Valuable Business– Integrated Payment System 3) Integrated Payment System Vicarious payment of various bills including fine, seizure/collateral, etc. Payments related with the car such as fine, seizure/collateral shall be made to each of the corresponding organizations, however, ATvalue logistic center pays for all at once. Car Car Corresponding with Organization with Default Default Car Car Corresponding with Organization with Default Default Car Car Corresponding with Organization with Default Default AT value Car Car Corresponding with Organization with Default Default Car with Corresponding Car Organization with Default Default Vicarious payment for all bills Payment of bills for each vehicle at by ATvalue corresponding organization
  • 53.
    4. Valuable Business– Green Scrap Service 4) Green Scrap Service Glass Polish UV Guard Glass Diesel Fuel Additive -Cerium -Cerium -Selenium, Lanthanum Increased Recycle Rate of Scrap Cars - Existing car scrapping business has been centering on some valuable parts such as scrap iron, however, the remnants of the scrap car after compression and LCD Screen -Europium, yttrium, cerium refrigerant gas are mostly neglected in the nature. - Possible to increase the scrap car recycle rate which currently remains at 84% due to lack of profitability and technological strength up to 95% by increasing the export Hybrid Nickel-Manganese -Lanthanum of parts and retrieval rate of rare metals through the -Cerium introduction of refined technologies. Hybrid Electric Motor & Electric Motor Catalyst Conversion Device Generator Neodymium Magnet -Cerium, Zirconium -Neodymium, praseodymium, Lanthanum dysprosium, terbium Business Tie-Up with Manufacturers -Setting up a business tie-up on parts export and scrap car with manufacturers that are experiencing conflict between corporate profit and environment protection concerning legal enforcement to derive a way to create profits mutually. -The manufacturer can reduce large scale facilities investment and infrastructure development which require enormous capital compared with the profitability under expectation through the Green Scrap System. 53
  • 54.
    4. Valuable Business– Green Scrap Service 4) Green Scrap Service Expansion of the Export of Used Parts and Domestic Consumption Market - Export and sales of reusable parts through thorough inspection and performance test. - Secure market for models that could not be exported due to the shortage of parts. - Expand market through insurance firms – Induce customers through the used parts supply market for high quality used parts costing about half of the price of new parts and the premium reduction policy of insurance firms. Green Scrap Service Membership Program - We signed the membership contract with car scrapping companies Joint Green Scrap Service throughout the nation and are increasing profits by training them to maximize recycle rate. We are also engaged in used parts • Multilingual Parts Shopping Mall exporter/agency business. • Training for Maximizing Recycle Rate • Used Parts Export Agency - Enhancing the service quality of overall scrap car market and increasing profit for car scrapping businesses. - Expansion of direct sales market through the multilingual shopping mall for used parts. Green Scrap Green Scrap Green Scrap Service Service Service Member Member Member Store Store Store 54
  • 55.
    02. Business _Software Development ATvalue Business
  • 56.
    1. Software Development 1)Affiliated Research Center Organization of Affiliated Research Center Head Development Team Manager Sw Application Design Developer Developer Established the affiliated research center in February 2012 Authorized by Korea Industrial Technology Association (KOITA) ATvalue engaged in the development of the integrated online export system since 2011 and is accumulating automobile export related techniques and know-hows. The company is developing updates and a variety of products required by service stabilization in the future 56
  • 57.
    1. Software Development 1)Affiliated Research Center Title of Patent: A Method of Providing Automobile Export Agency Service Using Reverse Auction Applicant: ATvalue Application No.: 10 – 2011 -0145322 57
  • 58.
    1. Software Development 1)Affiliated Research Center Title of Patent: Applied for patent for the Transmission Title of Patent: Applied for patent for the Automatic Calling Holding Advertisement Method for Smart Devices and Its Method for Wireless Mobile Telephone Device and Its System System Applicant: ATvalue Applicant: ATvalue Application No.: 9 – 1999 -000503-9 Application No.: 9 – 1999 -000503-9 58
  • 59.
    2. Software Development- Carcok 2) Export Service - Carcok Customer Gu Office Customs Agent Enter initial car Cancel the Vehicle Export Permit information Registration Carcok Service greatly simplified Send to DB (PL, CI) the time and expenses actually consumed during the export of cars Send information to DB through the online service. for the cancellation of Completion of the vehicle registration cancellation of vehicle Enter car information registration Export Permit (Export License) The existing user with export experience as well as the user without the experience can easily Purchase contract Send tax performance report to DB follow the export procedure. Pay price for car Hand over car and export license Completion of taxation process Send information to taxation DB Buyer Tax Accountant Gu Office Sign Contract and Taxation Procedure Report for Export Pay Price Performance 59
  • 60.
    2. Software Development- Carcok 3) Automatic Export Document 4) Vehicle Information Inquiry Technology Preparation Technology Real time inquiry of vehicle information in connection with public institutions (National Tax Service, THE Ministry of Land, Transport and Maritime Affairs, Korea Customs Service) and partners (Korea insurance development institute) Select the inquiry category and enter vehicle number >> Enter basic information of the vehicle Check the accident history immediately *Carcok‟s inquiry service is available 24 hours unlike the inquiry system of other companies and it also involves very simple Automatically prepares all documents information inquiry procedure. required for export 60
  • 61.
    2. Software Development- Carcok 5) Real Time Auction 6) Mobile Service Register Car for List Up Auction Auction Items Bidding Seller and bidders Provides the service which equally enables all functions of can easily join the Carcok Service on mobile device (smartphone) auction through web or mobile *Enabled Korea‟s first export related mobile service environment.
  • 62.
    2. Software Development- Carcok 7) Document Transfer Step 1 Save within Step 2 Send Required Document Documents Sends the export related documents saved to personal information storage Business Operator Related Export Related Documents Documents (Cancellation Certificate, to the selected receiver through fax or (Seal, Transcript, Business Export License, CI, PL) e-mail using My Documents feature of Registration) the App 8) Automatic Recognition of License Plate Photograph the license plate License No: xxGA 1234 Inquiry Recognizes the license plate photographed Model: K7 Service Maker: KIA Auction with a smartphone, inquires the original Service register of the vehicle, the accident Export Service history, business registration, sales price Inquire trend, and vehicle data in real time. Market Select the service you need Price
  • 63.
    2. Software Development- Brocolring 1) Introduction Brocolring The user can watch the advertisement while the user makes a call or receives a call to collect mileage point that can be used to pay for communication bills, goods or services provided by partner companies. Plays advertisements customized to the location, time, age, and 통화를 연결합니다 individual characteristics to provide the information suitable to the user YES NO and enhance advertisement effect. Watch Collect Use Send Receive Mileage AD Points Points Watch AD Again • If the user places the phone to the ear or is not watching the AD while making a call, the user will not receive the notice for reception. • When the receiver presses the Call button, he or she will be given the notice that the caller is watching the advertisement, and when he or she brings the phone to the ear, the proximity sensor will enable the call *Title of Patent: Applied for patent for the Transmission Holding Advertisement Method for Smart Devices and Its System (10-2012-0050818)
  • 64.
    2. Software Development- Brocolring 1) Introduction Collecting and Using Mileage Points Using the points provided while watching advertisement, the user can pay for communication bills and goods and services of partner companies, or other services such as PRECALL*. Collect Points Convert Points Use Points
  • 65.
    2. Software Development- Brocolring 1) Introduction Development Background _ Mobile advertisement market is recording steady growth every year due to the increase of smartphone users in Korea 26 Million Status of Smartphone Users in Korea 23 Million 20 Million 18 Million 15 Million 11 Million *Source: Korea Broadcasting Corporation, Korea Communications Commission, 7 Million TN SRI Regular Survey/ Google 2.4 Million 4 Million 1.4 Million 800,000 420,000 Sept. Dec. Mar. Jun. Sept. Dec. Mar. Jun. Sept. Dec. Mar. Jun. 2009 2009 2010 2010 2009 2010 2011 2011 2011 2011 2012 2012 Plan to increase mobile advertisement by domestic advertiser in 2012 560 Billion Size of Domestic Mobile Advertisement Market Decrease of Budget 435 Billion 19% Undefined 4% 336 Billion 199 Billion 274 Billion 174 Billion Unchanged Increase of Budget 25% 52% 2007 2008 2009 2010 2011 2012
  • 66.
    2. Software Development- Brocolring 1) Introduction Development Background _ Change in the communication market from 3G to 4G will be changed from existing banner and image oriented mobile advertisement to real time video Change in Share of LTE LTE Digital WCDMA 2011 120 1,377 3,813 2012 1,598 728 3,228 2013 2,894 245 2,659 2014 4,232 245 1,321 1,000 2,000 3,000 4,000 5,000 6,000 (10,000 People) Change in Communication Technology by Generation Real Time Video Advertisement Division 1G 2G 3G 4G Advent of more effective advertisement due to the Technology Analogue Digital WCDMA LTE advancement of communication technology Transmission 10kbps ~100 ~600 ~64kbps Speed or Less mbps mbps Voice, Voice, Text, Service Voice Multimedia Text mms, Internet
  • 67.
    2. Software Development- Brocolring 1) Introduction Combination of Mvoip (Mobile Internet Phone) and Brocolring It is expected that the number of ordinary call will decrease and the data communication will increase due to the stabilization of LTE network Effective profit model making best out of the changes in the communication market Commercialization of Mvoip Potential of Real Time Video AD by Advancement of Technology as the new mobile advertisement media Call for free and collect points brocolring
  • 68.
    2. Software Development- Brocolring 2) Commercialization Plan System of brocolring Brocolring business is comprised of the developer, partners (distributor, mileage point accepting companies), user, advertisement agency, and advertiser, and each of them play their roles individually Partner (Distributor) Developer •Distribution of App •Development, maintenance, and repair of App •Secure users •Management of web and mobile •Advertisement site •Development of additional product and services User Advertisement Agency •View advertisement •Induction of advertiser •Production and organization of •Use of points advertisement •Recommendation of user •Advertisement Partner (Point) Advertiser •Provide the place to use •Provision of advertisement points rates •Point conversion and recognition system
  • 69.
    2. Software Development- Brocolring 2) Commercialization Plan Composition of Entire Business Structure Brocolring Share BroColRing Distribution advertisement Contract profit Distribution of Advertisement Advertisement Advertiser sales/production Profit Direct distribution Distribution Send advertisement Advertisement Partner Provide points Agency Advertiser -Mvoip Company (Existing) -New Company in the Market Distribute Brocolring Install partner App Advertiser User Use of Point Communication Communication Point Company Charge/Partner Partner Purchase of Goods, etc.
  • 70.
    2. Software Development- Brocolring 2) Commercialization Plan 1 Strategic Business Tie-Up • Reduction of initial expenses for App advertisement and distribution • Requires public confidence for inducing large advertiser • Possibility of inducing partner’s users and potential customers Conditions in Selecting Partner Role of Developer Developing the business structure to establish the Win-Win relationship with the partner preparing to expand existing business and tap into the new market along with the commercialization of Mvoip market Ex) Setting up a business tie-up with My People (DAUM) which maintains 20 million users in the existing Mvoip market will enable the induction of existing users and facilitate the induction of large advertiser and new users based on brand awareness.
  • 71.
    2. Software Development- Brocolring 2) Commercialization Plan 2 Tie-up with Advertisement Agency • Receive order for large advertisement through the tie-up with advertisement agency and create profits stably • Receive orders for advertisement and reduces operating expenses of the advertiser • Organize advertisement customized for the target (location, sex, and age, etc.) Pay for Advertising Pay for Advertising Expenses Expenses Manufacture Advertisement Organize Advertisement Advertiser Advertisement Agency Developer Request for Advertisement Distribution of Profit Register App
  • 72.
    2. Software Development- Brocolring 2) Commercialization Plan 3 Partnership for the Usage of Point • Set up a business tie-up with the companies that accepts the points that the user collected • Developing a number of ways to use the points is connected to the increase of users • Advance payment with the point gives advantages in the negotiation with partners for contracts and provides more benefits to users. Pay for communication bill (Partnership with mobile communication provider) - The user can automatically pay for the communication bill with the collected points every monthly - The developer pays the mobile communication provider for the settled amount *Need to develop a payment system in connection with the bank Use as mileage point (Partnership with corresponding company) - Provide a number of companies that accept points
  • 73.
    2. Software Development- Brocolring 2) Commercialization Plan PUSH Strategy – Maximum exposure to user and potential user Exposure of Advertiser in Partner Sites _ Maximize advertisement effect through the exposure in mutual web sites Related Key Word AD _ Expose App name when searching partners and related key words App Market Distribution _ Android market / App store Overture Marketing _ Expose the search of mvoip related key word on the top Noise Marketing _ Compare features and advantages compared with App Star Marketing _ Use the image of celebrities that users are familiar with Push message _ Banner type advertisement in portal sites and IT related sites Viral Marketing _ Provide App guide and information about benefits through blogs, internet Knowledge database, and online club sites
  • 74.
    2. Software Development- Brocolring 2) Commercialization Plan Pull Strategy – Induce users by maximizing the advantages of the App in addition to the provision of mileage points Simplification of Use _ Simplification of the input of personal information required for login and the use of mileage points Membership Benefits _ Provision of mileage points to subscribers and recommenders when a member joins directly or through the recommender Character Product _ Addition of a variety of avatars and icons that add fun to use Gift Shop _ Enabled the exchange of gifts and coupons between users Event _ Events and gimmicks for the promotion of App Integration with Game _ Expose advertisement inside the game to enhance the concentration to advertisement and provide additional mileage points to the user Development of Additional Services and Related Products _ Provision of a variety of differentiated contents competitive with other contents *PRECALL_ Additional function for user convenience *PRECALL: Inquires whether the receiver is available for a phone call through a message before making a call, automatically makes a call when the receiver is available
  • 75.
    Car Supply inAsian Region ATvalue Business Plan
  • 76.
    Car Supply inAsian Region ATvalue Business Plan • Business Goal – Increase car supply in Asian region to increase the use of Asian Highway and land route and contribute to the advancement of tourism and logistics industry. • Background – According to the economic circumstances of most countries in Asia, it is difficult to purchase luxurious cars produced in Europe and America that the progresses in the car market is small. – The car demand in Asian region is increasing but the supply is not smooth due to insufficient investment into infrastructures such as the local manufacturing facilities and repairing facilities. – Roads such as Asian Highway are being developed, but the number of car owners is small that the utilization rate is low.
  • 77.
    Car Supply inAsian Region ATvalue Business Plan Plan the business suitable for the circumstances of each region by connecting with major hub points of the Asian Highway Target Areas – 6 Countries including Russia, Myanmar, Vietnam, Philippines, Kazakhstan, Tajikistan Local Distribution Complex of ATvalue in Each Country ATvalue Export Complex Establishment of Main Offices and Infrastructures in Corresponding Countries for the Sales of Used and New Cars / Rent-a-Car / Car Lease Businesses Asian Highway Branches in Each Country/Car Sales, Rent, Rep air, and Transportation
  • 78.
    Car Supply inAsian Region ATvalue Business Plan AH1: Area with warm climate and advanced tourism and leisure industries  Suitable for rent-a- AH6 car business. AH6: Runs throughout Russia, suitable for businesses based on the export of used cars than tourism and leisure AH1 industries due to climatic conditions
  • 79.
    Car Supply inAsian Region ATvalue Business Plan ATvalue Business • Export of Korean used cars → Local corporation Car Export • Apply the competitive car supply system designed for higher profit to local market ATvalue • Export to local corporation with the margin rate of 10% (Korea Overseas) • 9/109(≒8.25%) of the purchase price returned due to the deduction of tax for the purchase of used cars • Local corporation, imports cars from ATvalue • Sell in the local market with 30%~100% margin on the import price (including tariff) Local Car Sales • Share profit by 50% with the head office of ATvalue Local Corporation • Operate local repair station and follow-up service centers • Increase sales rate through the tie-up with financial/capital firms • Supply of battery refresher Operation of Local Car • ATvalue operates businesses such as rent-a-car or taxi by exporting new cars for business purpose Business • Import with the same margin rate for used cars, and produce 100% of profit through the (Rent-a-Car, business operation in 1 year • Supply 500 new cars (Russia) every 6 months Transportation) • Sell cars operated for 1 year as used car Local Corporations • High profit rate compared with the direct export of used cars
  • 80.
    Car Supply inAsian Region ATvalue Business Plan Car Supply and Investment Plan for 6 Asian Nations Unit: 1,000 $ Business Period for Each Country Investment Ratio 80,357 Country January 2013 Russia 47% 37,500 July 2013 Vietnam 17% 13,660 September 2013 Myanmar 10% 8,035 February 2014 Kazakhstan 10% 8,035 July 2014 Tajikistan 8% 6,696 February 2015 Philippines 8% 6,428
  • 81.
    Car Supply inAsian Region ATvalue Business Plan Goal for Car Supply in 1 Year in 6 Asian Nations Unit: Cars(1,000,000 won) Applied the Exchange Rate of 1$ = 1,150 won Total Export Goal for the Goal for Total Goal for the from Korea in Export of Cars Export in the Country Export of Remarks Previous Year for Operation Next Year by Used Cars (2011) (New Car) ATvalue Planning to increase the share in domestic car export to Russia up to 20% and the ratio of Korean 29,753 3,500 1,000 4,500 used car in Russia up to 3% as of 2013 --- Expecting Russia the increase of market ratio in Russia due to the (4,712,258) (81,850) (23,740) (105,590) investment to facilities such as follow-up service centers Many construction companies around the world are 10,288 1,150 300 1,450 Vietnam tapping into Vietnamese market, urbanizing many (139,930) (15,680) (6,720) (22,400) regions and also increasing car demands 827 1,200 200 1,400 Began to open automobile market, expecting high Myanmar (18,730) (12,070) (4,040) (16,110) growth rate Wealthy nation among Middle Eastern and Asian 4,880 2,000 200 2,200 Kazakhstan nations, steady demand for expensive cars, export (23,290) (11,200) (4,800) (16,000) increased as the level of Korean used cars elevated 4,804 2,000 100 2,100 Country with low income level, steady increase of Tajikistan (13,460) (5,600) (2,400) (8,000) inexpensive Korean cars 7,486 1,200 100 1,300 Expecting the increase of used car export due to the Philippines (35,389) (5,600) (2,400) (8,000) relaxation of restrictions on car import
  • 82.
    Car Supply inAsian Region ATvalue Business Plan ATvalue Automobile Export Car Purchase / Export Procedure
  • 83.
    Car Supply inAsian Region ATvalue Business Plan • Send out purchase list to 100,000 databases including new car dealers, used car companies and dealers, individual members, rent-a-car companies, and transportation companies • Carcok (developed by ATvalue) – Auction system ATvalue • Business tie-up with M Parkland, contract for the supply of cars for export with priority. • Business tie-up with eBay – G Market and Auction, contract for the supply of cars for export with Purchase of Cars priority. • Secure vehicles through the contract for supply of aged vehicles with Renault (Secure Cars to Export) Samsung, Chevrolet, Ssangyong Motors, etc. / supply of aged busses with express bus, intra- city, and regular bus companies such as Dongyang Express Bus • Public advertisement marketing through Brocolring ATvalue Export of Cars • Development of vehicle export logistics complex • Automation of export procedure such as Carcok Service and the recognition of license plate (Delivery to Export Logistics Complex) Export Local Corporation Supply of Cars to • Development of import logistics complex in each country (import operation, rent-a-car, used car / new car dealers, repair shop moving into head office) Importing Country • Management of rent-a-car and repair shops located in the border areas of Asian Highway (Delivery to Import • Place vehicles to public institutions, transportation company, etc. Logistics Complex in Each Country)
  • 84.
    Car Supply inAsian Region ATvalue Business Plan Purchasing and Securing Cars for Export by ATvalue Head Office Infrastructure and DB Sales Representative for New Cars ATvalue DB Rent-a-Car Companies and Rent-a-Car Companies Hyundai, Kia, Ssangyong around the Country , GM, etc. 1,027 22,215 Dealers Used Car Sellers Transportation 3,450 Sellers / 25,031 Companies Dealers 10,098 Companies Individuals List of Members + DB 38,000 84
  • 85.
    Car Supply inAsian Region ATvalue Business Plan Purchasing and Securing Cars for Export by ATvalue Head Office Infrastructure and DB Most exporters are having difficulties in supplying cars to export due to the worldwide increase of demand for Korean used cars, however, ATvalue has the infrastructure and the database for car suppliers developed through many years and is capable supply cars steadily. New Car Dealers 22,215 Dealers including Hyundai, KIA, Ssangyong, GM, etc. Used Car Companies / Dealers 3,450 Trading Companies / 25,031 Dealers Individuals List of Members + DB 38,000 people Rent-a-Car Companies Rent-a-Car Companies Nationwide: 1,027Companies Transportation Companies 10,098 Companies We have purchase dealers with excellent sales capacity and skills for thorough analysis and inspection about the problems that may take place in the future due to the condition of the car to bring maximum profits. 85
  • 86.
    Car Supply inAsian Region ATvalue Business Plan Purchasing and Securing Cars to Export by ATvalue Online/Mobile Real Time Auction ■ Reverse Auction System – The head office directly secures items based on the database of the auction list Bid for Used Cars 86
  • 87.
    Car Supply inAsian Region ATvalue Business Plan Purchasing and Securing Cars to Export by ATvalue Business-Tie up for Supply of Cars 1. We established the business tie-up with Carsdaq which Sell Cars to Export exclusively handles the trade of used cars in Gmarket, the Korean branch of eBay, the world‟s largest online shopping mall and we opened Atvalue‟s own exclusive page for the purchase of export cars and introduced the matching system that preferably receives the information about export cars, making it possible to secure a large number of cars. 2. We established business tie-up with (MPark) Land, the biggest used car trade complex in Korea to have 15,000 cars supplied with priority. 3. We also established business tie-up with Renault Samsung, Chevrolet, and Ssangyong Motors to have the supply of 2,000~3000 aged cars each month. 4. We also have contract with express bus, intra-city bus, and other bus companies such as Dongyang Express Bus to have the supply of 50~100 aged busses each month.
  • 88.
    Car Supply inAsian Region ATvalue Business Plan ATvalue Export Procedure Once the car is delivered to ATvalue Logistics Center, all data are collected and export related procedures will be automatically progressed. Designed to help the user to easily export cars without sophisticated knowledge and experience about exporting used cars. The user only needs to bring the car and approve the export. With the delivery, the export related documents will be prepared automatically through the scanning of the license plate, and all related processes such as the preparation for export from the confirmation of fine payment status to the inspection of car condition and repair, as well as the contract with buyer and shippers will be automatically completed. 88
  • 89.
    Car Supply inAsian Region ATvalue Business Plan ATvalue Export Procedure Conservation of resources and increase of energy efficiency Increasing the efficiency of the export operation through the development of export automation system can conserve the resources that used to have been wasted through complexity of process and increase the energy efficiency. - Saves time and material resources that were consumed from the visit of individuals or companies to various organizations in obtaining required documents to inspection, repair, and scrapping. Gu Gu Office Office Buyer ATvalue Automated Exporter Korea Customs Logistics Office Center Shipper Export by Existing Exporter ATvalue Export Complex Creation of Jobs and Contribution to Local Economy Creation of jobs in different areas due to the need for manpower following the companies moving into the complex and the system automation. Expansion of start up businesses and employment leading to the increase tax income and the enhancement of the quality of life of the local residents. Activation of local economy through individuals/companies/organization coming in from various regions of the country for the export of used cars.
  • 90.
    Car Supply inAsian Region ATvalue Business Plan ATvalue Export Procedure Example of Complex ATvalue Automation System Deliver cars from those who wish to export used cars (individuals/companies) Yard for Export Car Scan license plate – send export information Inspect vehicles/check ※ This is the image produced based on the assumption results that the head office purchases and prepares the site for lease business. If the site is rented, only the most Buyer matching required companies will be accommodated. Remittance of Payment / Notification of Expected Returns on Purchase Loading / Exporting Entrance of Car
  • 91.
    Car Supply inAsian Region ATvalue Business Plan ATvalue Export Procedure 1. Development of Export Logistics Complex Site Area: 495,867m2 If land is rented, 1.5 billion won a month / 18 billion won a year will be required. (Rent for each pyeong (3.3m2: 10,000 won) For purchase of land, 5,00 billion won will be required (construction cost not included). Site Location: Songdo, Incheon Prospective Tenant Companies - Exporter- Salvage Yard- Repair Shop- Gas Station- Consignment Service - Lodging Service- Food Service- Convenience Store- Car Wash - Loader- Used Parts Shop- Car Articles Shop- Tire Exclusive Shop- Wheel Exclusive Shop - Tinting Exclusive Shop- Plating and Painting Shop- Korea Customs Service Office- Gu Office Branch- Post Office - Educational Facilities- New Car Dealer- Used Car Dealer- Entertainment Facilities including screen golf ※ This is the image produced based on the assumption that the head office purchases and prepares the site for lease business. If the site is rented, only the most required companies will be accommodated. ※ The cash flow and income and expenditure analysis data in this proposal were prepared based on the assumption that the site will be rented. ※ Can be accommodated based on separate financing with the Korea Development Bank, KDB Capital, Hana Capital, etc.
  • 92.
    Car Supply inAsian Region ATvalue Business Plan Used Car Trade Business System of Local Corporation • Establishment of Local Used Car Trade Corporation (Different corporate characteristics and profit distribution depending on the terms of establishment in each country) ATvalue Export Cars Ex.) Price for purchase of cars in 10% Profit compared with ~200% tax (different in Korea 2,0700,000 won each country) compared the purchase price with import priceEx.) Car Ex.) Export Price 23,000,000 import tax 4,600,000 won won Russia, fixed tax for each model Local Corporation Import Cars ~100% Profit compared with the purchase price Ex.) Sales price (46,000,000 won) Local Sales
  • 93.
    Car Supply inAsian Region ATvalue Business Plan ATvalue Car Operation Business Rent-a-Car, Transportation
  • 94.
    Car Supply inAsian Region ATvalue Business Plan Car Operation Business • Transportation Business • Supply vehicles to public institutions or establish and operate a transportation company depending on the circumstances of the county. • Establish a transportation company and export and use ATvalue„s cars. • Rent-a-Car Business • Establish AH(Asian Highway) Rent-a-Car Companies: Open rent-a-car agencies near the national borders of the Asian Highway and other hotspots • Operate agencies with ancillary facilities in the beginning and end of the Asian Highway in each country and the area with high demand for rent-a-car to enhance convenience for road users and business efficiency.  Sell after 1 Year – For both rent-a-car and transportation businesses, sell cars operated for 1 year as used cars to create high profits compared with the export of Korean used cars.  Tap into the market aggressively and form a local automobile market infrastructure following the increase of local traffic and highways
  • 95.
    Car Supply inAsian Region ATvalue Business Plan Car Operation Business Flow Purchase / Profit from the Export of New Cars Export of New Cars 10% profit rate compared with domestic purchase Import of New Cars / Operate in Rent- Operating Profit a-Car and Taxi 100% of annual income rate compared to the Businesses import price of the vehicle (including tax) Operate for 1 Profit from the sales of operated cars Year and Sell as Used Cars 60% of the market price of used cars
  • 96.
    Car Supply inAsian Region ATvalue Business Plan Comparison of Profit from Car Operating Business and Profit from Export of Used Cars Increased profit rate from exporting and operating new cars in local area Ex.) Comparison of the Export Sales of Used Cars and the Operation of New Cars by Russia Grand Starex Unit: $ Purchase Price of Cars Operating ATvalue Sales Price of Total Income ATvalue Car ATvalue Car Deduction of by Local Income of Business Operating Cars by Local of Local Purchase Price Export Price Input Tax Corporation Local Profit Corporation Corporation (Including Corporation Tax) Export Price- 100% of the Operating Sell Operated 10% profit from 9/109 of Purchase Price + Import Price of Income + Sales Cars at 60% of purchase price purchase price Deduction of Cars through Price – Purchase the Market Price Input Tax Operation Price Export of 18,482 20,535 1,526 3,580 24,643 0 35,714 11,071 Used Cars Car Operation 20,089 22,321 0 22,321 28,571 28,571 21,428 21,428 Business (New Cars)
  • 97.
    Car Supply inAsian Region ATvalue Business Plan Purchasing and Securing Cars Exported by ATvalue Business Consultation with New Car Makers about Supply of Vehicles Through the cooperation for the supply of new cars manufactured in Korea (Hyundai, Kia, Ssangyong, etc.), ATvalue is exporting and supplying vehicles to the areas that the manufacture has not set up conditions for sales and manufacturer is expanding their domain of sales. Marketing through the Advertisement Solution Developed by the Affiliated Research Center Increase the collection rate for exportable vehicles owned by individuals and reduce marketing expenses Hyundai Motors Sales Subsidiaries ATvalue through the nationwide advertisement using Brocolring, the application developed by the affiliated research center.
  • 98.
    Car Supply inAsian Region ATvalue Business Plan Local Car Supply Various business plans for smooth supply of exported cars
  • 99.
    Car Supply inAsian Region ATvalue Business Plan Local Car Supply Channel Import Car Warehouse in Car Logistic Complex in Each Country Complete import procedures within the logistic complex and distribute cars for each business Used Car Transportat State Car Leasing Trading ion Institution/ Company Company Company Company Complete import procedures within the logistic complex and distribute cars for each business
  • 100.
    03. Used CarExport Business and Investment Plan Scale of Car Supply and Operating Business for the 1st Year ATvalue (Unit: 1,000 $) Investment Scale Business Export Scale Export Value Total Income (Annual) Used Car Export 65,714 312,500 73,057 7,321 Rent-a-Car 9,464 44,642 10,625 1,160 Taxi Business 9,464 44,642 10,625 1,160 84,821 401,785 94,482 9,642 Russian Corporation (Unit: 1,000 $) Operating Business Import Import Value Sales Total Income Income Used Car Export 312,500 73,035 78,660 5,625 Rent-a-Car 44,642 10,625 11,696 9,196 10,267 Taxi Business 44,642 10,625 11,696 9,196 10,267 401,785 98,482 23,392 102,946 26,160
  • 101.
    Car Supply inAsian Region ATvalue Business Plan Local Car Supply Business Installment Sales Service in Connection with Financial Circles • The income level of most Asian countries is not high  Expand the chance to own a car for the general public who does not have enough money to purchase a car by introducing the installment sales system in connection with financial institutions. • Financial institutions can secure safety for local business by providing loans on the car, the security in kind. • The money from car sales will be provided to head office as a lump sum payment from the financial institution. • Currently, we established business tie-up with KDB Capital Corp., Hana Capital, and Hyundai Capital and are providing the service.
  • 102.
    Car Supply inAsian Region ATvalue Business Plan Local Car Supply Business Repair Service • Help the smooth circulation of automobiles by resolving the follow-up service issues of the domestic export car market and seek for long-term business development by enhancing user satisfaction. • Set up shops near major hotspots and Asian Highway. • For new cars, the manufacturer provides the infrastructures that it is easy to set up the shop. • Space rented by repair shops: 330m2 area. Expansion of Auto Parts Market • Enhance the satisfaction of buyers and expand market by eliminating the disadvantages of domestic car export business, the parts supply and follow-up service. • Increase the sales ratio of Korean used cars and seek for a way to diversify the models that can be exported for a long term by exporting the parts of used cars and expanding supply network. • Open online shopping mall for domestic used parts in the future in many languages to facilitate the import from any country.
  • 103.
    Strong pole Cut saw Air compressor Lever block Paint dryer alignment Tire desorption Plate jack Break oil changer machine Air conditioner Air pump Wheel balance refrigerants changer Air conditioner Plate hammer press vacuum pump Plate base Tire auto air injector Mission oil changer Panel safer Oil drain Power oil changer Air operated grease Molding clipper Drum/disk grinder pump
  • 104.
    Machinist Peen Moving tool box Oil filter wrench Hammer Soft Hammer Mobile Floor Crane Pressure gauge Wrench Set Trans mission jack Timing light Socket wrench Jack Tab & die set Socket Spray gun Recoil tab Undercoating. chain pipe wrench Engine holder Sticker remover Antifreeze changer Break pad changer Welding machine Monitor type Torque wrench Auto clamp bore scope
  • 105.
    Dust collector Steam car cleaner Hot fan Cam shaft timing tool Bearing puller Component cleaner Engine flushing Wheel dolly Gear oil injector Battery charger
  • 106.
    Car Supply inAsian Region ATvalue Business Plan Local Car Supply Business Other Services • Eliminate customer inconveniences such as the climatic issues and discharge issues of the battery, the expendable part, by supplying the battery refresher parts to secure competitiveness. (The battery refresher is mounted to the existing battery to extend life and maintain the best charged/discharged status, exclusively supplied by ATvalue) • Mounted to cars exported and supplied to all regions in order to cope with cold regions on AH6 route and to extend the life of the battery.
  • 107.
    03. Used CarExport Business and Investment Plan Local Automobile Supply Business Estimated Sales and Profit/Loss (ATvalue) Unit: 1,000 $ 1st Year 2nd Year 3rd Year 4th Year 5th Year Division Total (2013) (2014) (2015) (2016) (2017) Sales 98,515 103,538 107,904 114,330 123,374 547,661 Sales Cost 84,849 87,851 91,761 97,513 104,758 466,734 Sales Management 7,111 7,741 8,506 9,343 10,258 42,961 Expenses Ordinary Income 6,554 7,944 7,636 7,472 8,356 37,965 Ordinary Income After 6,554 30,624 36,732 37,867 40,417 152,195 Distribution Ratio of Ordinary Income 7% 30% 34% 33% 33% 7% After Distribution Estimated Sales and Profit/Loss (Russia) Unit: 1,000 $ st nd rd th th 1 Year 2 Year 3 Year 4 Year 5 Year Division Total (2013) (2014) (2015) (2016) (2017) Sales 92,400 144,864 153,401 159,317 165,233 715,218 Sales Cost 95,758 99,375 103,158 107,126 111,302 516,722 Sales Management 2,800 3,602 3,927 4,213 4,491 19,035 Expenses Ordinary Income -6,158 41,885 46,315 47,977 49,440 179,460 Ordinary Income After -6,158 24,022 23,158 23,989 24,720 89,730 Distribution Ratio of Ordinary Income -7% 17% 15% 15% 15% 13% After Distribution
  • 108.
  • 109.
    04. Investment Proposal 1.Investment Request: 8,035,714 $ 2. Purpose of Fund Myanmarese Usage ATvalue Head Office Russian Corporation Total Corporation Investment to the Investment to the Investment to the Purpose Export of Used Cars Export of Used Cars Export of Used Cars Amount 35,714,285 $ 37,500,000 $ 7,142,857 $ 8,035,714 $ Investment Period September 2012 September 2012 December 2012 3. Major Conditions - 8,035,714 $ to the head office of ATvalue - ATvalue invests 50% to Russian and Myanmarese corporations, respectively (condition: 50% of profit) - The profit of head office and the profit of local corporations will be shared with investors (ratio can be adjusted)
  • 110.
    04. Investment Proposal 4.Profit Structure (1) Profit and Loss according to Head Office Export (1st Year) Unit: 1,000 $ Division Income Expenditure Profit and Loss (1st Year) Profit and Loss (2nd Year) Used Car Export 73,080 Used Car Purchase Export of Cars for Lease 65,772 Used Car Area 7,308 Export of 211,964 New Car Purchase for Lease Lease Area 2,119 Used Cars Purchase Tax Deduction 19,076 Other ▲4,166 4,238 Other Expenses/Taxes 8,422 Accumulated Current Net Total 98,515 93,271 5,243 Income 29,742 (2) Distribution of Profit based on the Operation of Local Corporations Unit: 1,000 $ Profit and Loss Profit and Loss Division Income Expenditure Dividend (1st Year) (2nd Year) Used Car Purchase 72,346 Used Car Area 6,397 Used Car Area 27,573 Used Car Sales 78,743 Rent Car Purchase 11,706 Rent Car Area ▲4,877 Rent Car Area 8,958 Russian Used Car Operation 6,828 Taxi Purchase 11,706 Taxi Area ▲4,877 Taxi Area 8,958 Corporation Taxis Operation 6,828 Other Expenses / Taxes Other ▲2,800 Other ▲8,961 2,800 92,400 98,558 ▲ 6,158 36,527 17,863 Used Car Purchase 16,399 Used Car Area 2,906 Used Car Area 4,904 Used Car Sales 19,305 Rent Car Purchase 2,795 Rent Car Area ▲ 1,165 Rent Car Area 2,885 Myanmarese Used Car Operation 1,630 Taxi Purchase 2,795 Taxi Area ▲ 1,165 Taxi Area 2,885 Corporation Taxi Operation 1,630 Other Expenses / Other ▲ 769 Other ▲ 2,297 Taxes ▲ 769 22,566 23,767 ▲ 192 8,378 4,815 114,967 134,153 ▲ 6,350 44,906 22,679
  • 111.
    04. Investment Proposal 5.Profit Structure for 5 Years - 136.4 billion won profit in 5 years with 90 billion won investment (Earnings Rate: 51.6%) Unit: 1,000 $ Division Investment 1st Year 2nd Year 3rd Year 4th Year 5th Year Total Operating ATvalue 35,714 6,554 7,945 7,636 7,472 8,356 37,965 Income Russia 37,500 17,863 23,158 23,989 24,720 89,728 Dividend Myanmar 7,142 4,815 5,937 6,406 7,341 24,500 Dividend Total 80,357 6,554 30,624 36,732 37,867 40,417 152,195 Deduction of 1,310 6,125 7,346 7,573 8,083 30,439 Corporate Tax Current Net 5,243 24,499 29,385 30,294 32,333 121,756 Income 6. Analysis of Investment Earnings Rate Unit: 1,000 $ Division ATvalue Russia Myanmar Total (1) Payback Period 5.71 Years 3.52 Years 2.91 Years 3.70 Years (2) Current Net Value (8%) ▲10,755 9,061 5,394 12,132 (3) Internal Rate of Return ▲5.04% 15.10% 28.15% 12.99% *The major reason the low profit of the head office is the rent for the land secured for exportation.
  • 112.
    Professional automobile exporter! Futureleading figure in the world market! ATvalue Co., Ltd.
  • 113.
    Value Innovation Relationship Innovation Trading Innovation Competence Innovation Provide the best value to Build trust of all interested Aim at customer-oriented Establish the best global customers parties export structure competence