| A: |
Please tell me about Japanese used cars today. I hear that a considerable
number are being exported to other countries… |
| B: |
Although the economy is currently on a course of recovery, during
the deflation people refrained from purchasing new cars even when
they needed to and continued driving their old cars. Therefore, domestic
car manufacturers concentrated their efforts on domestic sales of
used cars. However, this was an abnormal situation for manufacturers
since their primary task is to manufacture and sell new cars. It was
a way of business that they resorted to, but not their main operation.
Luckily, the economy is turning up, and manufacturers have begun concentrating
on their true operation of selling new cars once again. |
| A: |
So this will lead to an increase in exports of used cars?
Japanese cars receive high evaluation overseas. |
| B: |
There is such a tendency. There are many routes that Japanese used
cars travel overseas, such as (1) officially being exported from Japan,
(2) cars manufactured and used overseas are sold and distributed as
used cars, (3) cars are stolen in Japan and then exported, and (4)
cars that have been junked are taken apart and usable parts are exported.
Here, we will look mainly at (1). |
| A: |
How many Japanese cars are officially exported per year? |
| B: |
According to the Japan Foreign Trade Monthly, it was 696,544 in
2004. In monetary amount, it totaled approximately ¥288,537,000,000. |
| A: |
I had heard that 1.1 to 1.2 million cars are exported per year… |
| B: |
No, not that many. Probably more about 730,000. Of these, I expect
30,000 to 40,000 to be stolen car exports. |
| A: |
How can the export procedures be done when the car is stolen? |
| B: |
Every used car to be exported has a unique vehicle identification
number consisting of letters and numbers stamped on it, but the true
number is scraped off and renumbered. Also, a vehicle inspection certificate
that proves that the vehicle has been deregistered is needed, but
this certificate can be reissued by application as many times as necessary.
Therefore, with one deregistration, several vehicle inspection certificates
can be obtained, and by scraping off the vehicle identification numbers
of the stolen cars and renumbering them with the number on the certificate,
the paperwork is complete; several cars could thus be exported as
“the same car.” Customs are one step behind, and cannot
catch them. Approximately 60,000 cars are stolen per year, and it
is said that of these cars, about 30% are returned to the owners,
and about 70% are exported. However, regulations regarding stolen
cars and export control are becoming more and more stringent every
year; efforts are being made. |
| A: |
Which countries and/or regions are the official exports made to
most? |
| B: |
The ranking differs in the number of cars and monetary amount,
but the ranking by number of cars in 2004 is as follows: (1) New Zealand
124,346 (cars); (2) United Arab Emirates 108,912; (3) Russia 108,593;
(4) England 56,764; (5) Chile 23,830; (6) The Philippines 21,251;
(7) Cyprus 20,255; (8) Peru 19,219; (9) Jamaica 13,233; (10) Thailand
12,631; (11) Malaysia 12,212; (12) Sri Lanka 11,918; (13) Trinidad
9,626; (14) Australia 8,066; (15) Bangladesh 6,282; (16) Malta 4,133;
(17) Indonesia 3,126; (18) U.S. 2,965; (19) Mauritius 2,942; (20)
Pakistan 1,648; and (21) Others 124,592. Ranking by monetary amount
is as follows: (1) New Zealand 52,022 (million yen); (2) Russia 43,023;
(3) England 25,805; (4) United Arab Emirates 20,439; (5) Malaysia
19,962; (6) Cyprus 14,505; (7) Indonesia 9,478; (8) Jamaica 9,191;
(9) Thailand 8,193; (10) Sri Lanka 6,349; (11) The Philippines 4,998;
(12) Peru 4,992; (13) Bangladesh 4,983; (14) Trinidad 4,910; (15)
Chile 4,297; (16) Australia 3,701; (17) Pakistan 3,036; (18) Mauritius
1,693; (19) Malta 1,492; (20) U.S. 1,223; and (21) Others 44,245.
For example, Chile is ranked 15th in monetary amount but 5th in number
of cars. This shows that people in Chile are buying used cars with
low unit prices. On the other hand, Indonesia ranks 7th in monetary
amount, but 17th in number of cars. This shows that people in Indonesia
are buying used cars with high unit prices. Japanese used cars are
exported to more than 160 countries and regions, from the tropics
to the far north. |
| A: |
From looking at these export numbers and monetary amounts, it seems
that the number exported to the U.S. and Europe is small, while the
number exported to other countries and regions is large. |
| B: |
Yes, that’s right. In U.S. and Europe, Japanese manufacturers
have built local factories for local manufacturing so as to avoid
trade friction, so used cars manufactured locally are sold in those
countries. That’s why the export numbers are small. |
| A: |
In terms of car size, which countries does Japan mainly export to? |
| B: |
Compact cars are mainly exported to Cyprus, Russia, Sri Lanka, New
Zealand, Malta, etc. Mid-sized cars go mainly to New Zealand, Russia,
United Arab Emirates, England, Malaysia, Jamaica, etc. Large cars
are exported to New Zealand, Malaysia, Russia, Indonesia, United Arab
Emirates, etc. |
| A: |
As mentioned before, Japanese used cars seem to receive very high
evaluations in other countries… |
| B: |
Yes, that’s right. They receive high evaluation because they
offer high quality at reasonable prices, are less likely to break
down and therefore long-lasting. Used cars with Japanese company names
or product names still painted on the bodies are often seen on the
roads of overseas countries. It is even said that the Japanese letters
remaining on the body prove that that car had not had any accidents
in Japan, and cars with such letters are sold at a higher price than
normal Japanese used cars. When the paint job is re-done in the country
of use, there seems to be many requests of “please leave the
Japanese letters on the bodies.” I suppose that Japanese letters
are a sign of dependability. |
| A: |
How about imports of used cars into Japan? |
| B: |
The number imported is very small. Japanese people who purchase
foreign cars tend to belong to the wealthy class, so they mostly purchase
new cars. In many cases, then, imports of used cars into Japan occur
when people bring back the Japanese cars or foreign cars they were
driving while they lived in other countries. Depending on the country,
importing used cars is often not permitted unless they have been used
in that country for a certain number of years. |
| A: |
I have heard that some countries shut out a part of used car imports
by setting regulations such as no right-hand-steering-wheel cars or
deliberately levying an extremely high import tariff (400 to 500%)
in order to protect their own automobile industry… |
| B: |
Yes, that’s right. And, I also hear of differences in car evaluation
between Japan and other countries. For example, when Japan exports
a car that should be junked by its standards, it is sometimes evaluated
as, for example, a ¥50,000 car overseas. In this case, an extremely
high import tariff would be levied on that car, and in the end it
would be sold for ¥500,000 to ¥600,000. |
| A: |
Do overseas used car buyers come to Japan every time they want to
buy, and look at each car to conduct price negotiations? |
| B: |
In the past, this was the most popular method. However, there are
now many foreign buyers, especially Pakistani, who have offices in
Japan to buy used cars. Also, since visiting Japan or setting up an
office to buy used cars is expensive and time-consuming, some Japanese
companies sell used cars over the Internet. They collect information
such as car model, mileage and suggested prices from domestic used
car dealers, translate them into English and create a database, distribute
information via the Internet or fax to overseas dealers, and then
have them make their purchase. With this method, the risk of stocking
is small. Transport and inspection of these purchased cars are outsourced
to those who specialize in those areas. In the beginning, overseas
buyers were not comfortable with buying used cars without actually
seeing them, but since this method cuts cost, they have begun to employ
it. There have been some cases where payment could not be collected,
but sellers and buyers alike are becoming accustomed to this method. |
| A: |
So, I suppose that Internet sales of used cars will take off in
the future. |
| B: |
I think so. There are 800 used car dealers in Japan, and competition
is fierce. Many of them are turning to overseas markets. |
| A: |
I hear that there are many cases where Japanese used cars are re-exported
from the country that they were first exported to. |
| B: |
Yes. The Dubai government of the United Arab Emirates will open
a free trade zone for used cars in 2006. Dubai is a transition point
as well as a sales market for Japanese used cars. |
| A: |
What happens to exported Japanese used cars that have been used
to the point where they cannot be driven anymore? |
| B: |
They would be taken apart to the last screw, and every usable part
or component would be put up for sale. The body would be sold to a
scrap metal collector. These cars would lead “a third life.” |
| A: |
So I see that cars are put to maximum use. |
| B: |
Yes. Even in Japan, the Automobile Recycling Law that was put into
effect in January 2005, and the trend to recycle usable parts in order
to promote conservation of resources is beginning to appear. |
| A: |
What will happen to the used car market in Japan? |
| B: |
Since the economy is improving, sales of new cars will likely increase,
and more and more used cars will probably be exported to other countries. |
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