Quality Supplier Screening and Evaluation Mechanism

HLC fully implements 100% local procurement across Taiwan’s main island and outlying islands. By shortening supply chain transportation distances, we effectively reduce our carbon footprint, thereby lowering carbon emissions during operations. At the same time, prioritizing local suppliers not only strengthens local economic development but also promotes the sustainable operation of regional industrial chains, thus achieving the dual benefits of environmental friendliness and economic growth. 

Supplier Management Practices

HLC has established “Supplier Management Procedures” and “Procurement Management Procedures” as the basis for all units to follow when selecting, evaluating, supervising suppliers, and conducting procurement transactions.

The General Affairs Office compiles the results of supplier evaluations from all units and makes recommendations for“continued collaboration,” “under observation,” or “not approved for collaboration”. Vendors with poor cooperation or unstable supply quality are under observation or on an elimination list. The observation period is a maximum of one year, during which the evaluation unit directly requests the supplier to make improvements. A re evaluation is conducted at the end of the observation period, and the supplier’s improvement status serves as the basis for continued collaboration, thereby reducing the Company’s operational risks. Based on the 2025 supplier evaluation results, no suppliers were placed under observation. One supplier was excluded from further business with the Company because its cooperation in providing training courses fell short of expectations.

Green Procurement

HLC actively implements green procurement by prioritizing products and services in line with environmental standards, including energy-efficient equipment, low-carbon materials, and eco-certified goods, to ensure that the supply chain aligns with sustainable development principles. By adopting measures, such as introducing low-emission (plug-in) HEVs and EVs, selecting high-efficiency equipment, and purchasing FSC-certified paper, we not only reduce environmental impact but also motivate suppliers to collectively pursue green transformation. Starting in 2024, HLC initiated a comprehensive energy-efficient equipment replacement program, to replace regularly operating air conditioning and lighting equipment first and gradually extending the program to a broader range of equipment, thus contributing to environmental sustainability. Green procurement totaled NT$1.23 billion in 2025. In the future, the Company will continue to take more proactive action to deepen its green procurement policy, strengthen supply chain management, and achieve a win-win for environmental responsibility and corporate operations.

Alliance Member Management

The full realization of an alliance brand’s value depends on its members’quality management and ability to meet customers’ needs through their products and services. Since establishing the HOT Car Alliance in 2010 and the HOT Repair/ Maintenance Alliance in 2013, HLC has continued to expand the HOT Alliance network throughout Taiwan. As of the end of 2025, the network comprised 612 members, including 418 used-car dealers in the HOT Car Alliance and 194 maintenance and repair shops in the HOT Repair/Maintenance Alliance. The objective is to create a professional and high quality used car transaction and repair/ maintenance environment.

Membership Review and Evaluation Mechanism

To ensure the quality management of franchise members, car dealers or repair shops must pass the Company’s internal review mechanism before officially joining the HOT Car Alliance. In addition to ethical corporate management as a basic requirement, applicants for membership in the HOT Car Alliance must achieve an annual installment transaction volume of over NT$8 million and be confirmed that they have no negative reputation records in HLC’s proactive audit. The HOT
Repair/Maintenance Alliance’s franchisees must also possess at least two vehicle lifts and two or more professional repair technicians, pass internal operational and technical standard reviews, and maintain a good reputation.

After joining, HLC establishes an alliance member evaluation mechanism to conduct regular evaluations semi-annually and finalize evaluation scores at the end of each year. The evaluation is divided into three major dimensions: “performance “management,” and “service”. As for “brand maintenance” of the “management” dimension, sales personnel conduct inter-regional cross-evaluations every six months. They assess whether the in-store and external environment, signage presentation, product/tool displays, and promotional material placement comply with the alliance’s regulations. The “Policy Implementation” criteria assess whether franchise members effectively implement policies promoted by headquarters (such as their cooperation in activating warranty coverage).

Members who fail to meet the evaluation standards will be offered guidance and opportunities for improvement to help them enhance their operations and service quality. If members fail to comply with improvement measures, the alliance reserves the right to terminate the contract proactively to ensure overall brand image and service quality, thus maintaining the alliance’s professionalism and market reputation. In 2025, there were no members who failed to meet evaluation standards and also failed to cooperate with improvements, indicating that all the alliance’s members continue to meet established requirements, consistently provide high-quality services, and jointly maintain the alliance’s brand value and market competitiveness.