A: As the recession drags on, the Japanese market for used goods seems to be growing, doesn't it.

B: Yes, used goods are eating into the market for new goods. Unable to ignore this trend, distributors and manufacturers alike are frantically trying to find and build up their own markets for used goods. While there would of course be no market for used goods without new goods, the used goods market is expected to grow somewhat if current trends continue, threatening firms that focus too much on new goods with the prospect of being left behind by changes in consumer preferences. They are therefore desperately trying to win customers for used goods, etc.

A: I should think used goods can be all kinds of things.

B: The main types of goods we're talking about are cars, home appliances, personal computers, game consoles and software, photocopiers, golf clubs, car gear, audio/video equipment, clothing and cameras, etc.

A: Could you explain one by one what the situation is like regarding each of these kinds of products?

B: Starting off with cars, Japanese households in 2001 owned around 41.20 million cars, of which 4.74 million were registered as used vehicles. That's about 11.5% of the total. As these include some company-owned cars, the number in private hands is probably around four million. 64% of users say they would be happy with a used car at the time of purchase.

A: What are the key points regarding the sale of used cars.

B: Offering a lineup of the main models from all makers. Lineup is the key.

A: What do dealers who stock only Toyota cars, for example, do to enhance their lineup?

B: They lay in stock from outside by buying at auctions.

A: Why do new car dealers put such a priority on selling used cars when they are only going to cannibalize their sales of new vehicles?

B: Although 20% of buyers switch from used cars to new cars, the proportion switching the other way from new to used cars is around 27% and rising rapidly. In Japan as in the United States, there is emerging a class of consumers who will only drive used cars. While as we mentioned there were 4.74 million used car registrations in 2001, the number of new car registrations was only 3.01 million, around 70% of the number at its peak.

A: So in order not to lose customers who have stopped buying new cars, dealers have been forced to focus on selling used cars, including those made by other makers, as well.

B: Right.

A: Are used imported cars also sold?

B: Official import agents for new cars are now starting to deal in used imports, setting up separate showrooms for used vehicles only. One car import agent sold 930 million new cars in 2001 and 380 used cars.

A: Are used Japanese vehicles exported?

B: While cars are exported to other countries where this is possible, there are often problems in the way, such as absurdly high import tariffs and varying high standards of assessment that make it impossible to sell vehicles.

A: What about the market for used home appliances?

B: Well, the term of course covers a plethora of products, so let's focus here on just electric washing machines, of which there are around 34.82 million in Japanese households. In 2001, around 160,000 used washing machines were sold. The market is extremely small, with only 4.1% of people having purchased and 2.7% having sold a used machine.

A: Why is that?

B: Washing machines are not as expensive as cars and are also used extremely frequently, reducing their working lives.

A: I hear that the number of people who want to sell their washing machines has been on the rise.

B: This is because, with the introduction of the Specified Household Electrical Appliances Recycling Law, it now costs money to dispose of things, and so the number of people wanting to sell their machines has increased.

A: How about exports of used washing machines?

B: Most Japanese manufacturers have production operations overseas and there appears to be a market for used products overseas, but they are rarely exported from Japan.

A: What is the situation like as regards personal computers?

B: There are 18.36 million PCs in Japanese homes, and around 910,000 used PCs were sold in 2001. Although 19% of consumers have purchased a used PC in the past, the market is expected to grow to twice its present level. Despite sales of new PCs being in the doldrums, many businesses dealing in used goods are enjoying double-digit growth on the previous year.

A: Why is that?

B: It's probably because families without PCs are buying computers for their children as computing is to be made a compulsory subject at middle and high schools from 2003. This is leading to increased demand from consumers who are content with low-priced used PCs rather than new products.

A: How about exports of used PCs?

B: Although there aren't any statistics, most exports seem to go to Asia.

A: What about photocopiers?

B: Photocopiers have long been covered by the "Green Procurement Standards" governing purchases by government and municipal offices, encouraging photocopier manufacturers to develop environmentally friendlier products by, for example, making photocopiers out of recycled parts and recycling photocopiers. One leading manufacturer tried marketing a photocopier assembled only from recovered parts which was guaranteed to be as good as new, but this met with unexpectedly poor sales.

A: Why was that?

B: Because, being of the same quality and functionality as new products, it was priced the same as new products. Users decided that it would be better to buy a new product if the price was the same.

A: How did that manufacturer react?

B: It brought down the price by just cleaning the exterior and replacing used parts instead of dismantling recovered photocopiers. It was targeted at public agencies and major firms concerned about the environment, and it adopted a three-year rental system with monthly payments instead of selling the machines outright. It is currently working hard to build up sales. If it succeeds, it is considering expanding the range to low-speed models targeted at small businesses. Much photocopier production is overseas, and exports are low.

A: What about other used goods, such as golf clubs, automobile supplies (such as tires, car navigation systems and car stereos), audio/video equipment, clothing and cameras?

B: Unlike the goods we've talked about so far, the markets for these products are comparatively small. Secondhand stores used to be thought of as being dark and messy places. Nowadays, however, stores are spick and span and the goods on sale shining clean. Crucial to the success of secondhand stores is how attractive the goods are that they buy from sellers. Chain stores with low operating costs and high profits are also beginning to appear. Household goods and clothing are often bought and sold at open-air flea markets around Japan. There are also emerging stores that buy unneeded items and daily necessities received as end-of-year and midyear gifts, which they then sell for a certain profit. Goods such as golf clubs, audio/video equipment and cameras are increasingly bought and sold through online auctions.