VT Holdings (TSE:7593), an automobile dealership, was the largest detractor to Fund performance. The firm hit an operational snag with a decline in its profitable maintenance service business stemming primarily from weaker auto sales that followed the 2011 Fukushima earthquake. In Japan, new cars are required to be inspected after three years, however, since 2011 auto sales were so low, the firm’s revenues from inspections this year sagged. We believe this is a temporary issue and have added to our position with a cautious eye on VT’s progress.
From Matthews Japan Fund (Trades, Portfolio) Q3 2014 Commentary.
