JAPAN’S leading carmakers are expanding their reach into developed countries like the USA and UK. But even in the poorest countries of the world the Japanese cars and trucks are gaining a large and loyal following, thanks to a brisk trade in used Japanese cars.
Few years ago, the only customers in Japan for used automobiles were scrap dealers. But in recent years huge, high-tech bazaars have emerged across Japan, including the online bazaars - efficiently dispatching Japan’s unwanted cars, trucks and buses to dealers who in turn channel the vehicles to everywhere from Logos to Bangkok.
“Used cars are still high quality cars. They can be driven three or four years. Every right-hand drive country in the world is buying these cars now,” says Mike McCarthy, owner of Proficient Export Services in Nagoya, and a regular participant in the USS auction company in Nagoya, which runs every Friday until almost midnight.
Steven Bennington, another used Japanese automobile dealer in Nagoya, says Africa, South America, Russia and the Caribbean and even countries like Iraq, Iran and Burma eagerly purchase used Japanese cars. But the 16 year old veteran says his major exports come from England, Ireland, Australia and New Zealand.
One of the hottest businesses in Japan right now is used car auctions. It may not be as glamorous as robots or IT, but hyper-efficient auctions, such as those run by industry leader USS, draw buyers by the thousands. It’s an auction without hammers or gestures, or human auctioneers. Bidding is performed in silence, by the push of a button. An endless parade of used trucks, sedans, compact cars and SUVs for sale are displayed on the screen for a matter of moments, before an accelerated flurry of button jabbing decides the new owner. In an average of 20 seconds, it’s going, going, gone.
“Under the old-fashioned system of bidding by hand signals and human auctioneers, if we started at 10 a.m. and finished at 5 or 6 p.m., we would only have time to sell 350 cars a day,” says Futoshi Hattori, USS president. But with the new point-of-sale system, cars volume suddenly surged into the thousands. In the old sysytem, each car was driven onto the arena floor, but to save time now the company simply snaps digital photos of each vehicle and projects the images on huge screens at the front of the auctioneer-less auction hall, and via personal monitors installed at every dealer’s seat; the newest auction site in Yokohama, opened in February, has room for 1,300 dealers. “With the point-of-sale system and by using video displays of the cars, our biggest auction site [in Chiba] can move 12,000 cars a day,” claims Hattori, calling his system the world’s fastest.
The 82,000 square-meter Yokohama auction site down the road from the national fuel-cell demonstration hydrogen station–was previously owned by Cosmo Oil, a gritty industrial estate built on land reclaimed from Yokohama Bay in the city’s Tsurumi Ward. But to USS spokesman Shigeo Hara, the location is as good as it gets: “We’re close to Haneda Airport, the harbor–we have the best access here of any auction site.”
USS is short for the techie-sounding “Used car System Solutions,” but the acronym originally stood for something considerably less high falutin’. Back in 1980, “USS” was President Hattori’s own sober assessment of the firm’s tenuous existence: Used car Scramble Survival. The company, which once had to plead with supermarket owners to temporarily lend their vacant lots for auctions, gained a new lease on life with the adoption of high technology in the fall of 1982.
Under the old system, “once the auctioneer got to know the buyers, he would favor the regulars and ignore bids from the rest,” says Hattori. Searching for alternatives, he learned about a point-of-sale auction system for meat, that Fujitsu had developed which involved suspending numbered sides of beef and pork from the ceiling.
“At first it was difficult to get people used to it,” he says. “But younger Japanese generation grew up on video games, and they embraced this system.”
Finicky Japanese consumers generally shun used cars, so unlike in the US, there is virtually no domestic demand for used vehicles. But Japan’s junk is treasure in the third world. A surfeit of used Japanese cars is flowing to emerging markets from Sri Lanka to Kenya, Iraq and Afghanistan. Whenever and wherever consumers can’t afford to buy new cars, increasingly they’re buying used Japanese ones.
Tokyo representatives for GM, Ford and Daimler-Chrysler declined to comment, but Detroit has good reason to be nervous about the tide of used Toyotas and Hondas being exported into developing countries. The onslaught of exports could end up creating brand loyalty to Japanese cars in the handful of emerging markets left in the world. The dealers say that US car while prized for their styling and brute horsepower are considered shoddy and unreliable, while used Japanese cars just keep on ticking. USS president Hattori says “The world is a big place. And Japanese cars are so reliable they can keep going for 200,000 miles. Even when they don’t run anymore they can be broken down for parts,” he says.
USS expects to handle two million cars a year by 2006. The firm’s flagship auction in Noda, Chiba Prefecture, is due for a facelift and is scheduled to reopen this summer on a 529,000-square-meter piece of land, enough space to bid six cars at once, seat 2,400 dealers and handle 15,000 vehicles a day.
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