By on June 11, 2014

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While we’re fortunate to be treated to a weekly look at American auto auctions courtesy of TTAC’s Steve Lang and his Hammer Time series, today we’re getting a glimpse of an auction on the other side of the world.

Prof. Mike Smitka of Washington & Lee University posted an entry at his own Autos & Economics blog, detailing his trip to an auction near Osaka, Japan. Smitka outlines the differences between American and Japanese auctions, and explains the economics behind Japan’s used car market.

With annual inspections occurring at the ten-year mark, there is usually a flood of 8-year old cars being scrapped or exported. Some years ago, the rather rigorous standards were relaxed, which in turn allowed owners to keep their cars for longer. Even still, there is less supply of older vehicles, and they are usually exported to Pakistan or Russia. Contrast that to America, where the average vehicle age is around 11 years old.

That of course, is bad news for new car sellers, who could typically rely on a steady stream of consumers replacing their cars every decade or so. But as Smitka shows in another post, that trend doesn’t look like it can continue. Between higher consumption taxes, shrinking demographics and a need to trim streamline the OEM retail channels, Japan’s new car market – and its auto industry overall – look to be facing some major changes in the near future.

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15 Comments on “A Look At A Japanese Auto Auction And What It Holds For The Future...”


  • avatar
    VoGo

    Prof. Smitka’s blog is awesome – thanks for the reference!

    From the looks of things, Daihatsu’s market prospects increasingly resemble a Charade.

  • avatar
    gtemnykh

    The Siberian part of Russia is absolutely inundated with RHD Japanese imports, they present an excellent value proposition. I think they may have cracked down on this flood of cheap JDM imports with tariffs of various sorts. At this point, getting parts for a Toyota Mark II or Land Cruiser is about as easy as getting them for a Lada.

    I really like the stripped down courier versions of various station wagons, like the Honda Partner and Toyota Corolla wagon. Always white paint, unpainted black bumpers, and leaf sprung rear end. The ’94 corolla we once rented was saddled with a 4spd stick shift! My hobby-farming parents would love to have one of these in the US, they’re currently employing their 2007 Fit for the task.

  • avatar
    Ron

    Actually, cars purchased new are inspected at the end of their third year (light trucks, after two years), and every two years after that. Cars purchased used are inspected every two years. Since an inspection costs $1,300-2,600 (at current exchange rates), or $800 for Kei cars, the Japanese tend to get rid of their vehicles just before the second inspection. Cars usually become worthless just before their third inspection.

  • avatar
    Noble713

    $1300-$2600?! That sounds outrageous but maybe it is location dependent. I’ve had 3 JCI’s done in Okinawa in the past 3 years, all for fairly old cars by Japanese standards:

    1997 Evo IV ~$800 (Y plate)
    1997 Chaser Tourer V ~$800 (Y plate)
    2003 Mark II iR-V ~$900 (Kanji plate)

    And that’s including minor fixes like replacing brake pads.

    • 0 avatar
      Ron

      Noble713, you may be right, but it is still expensive, which is sufficient motivation for many people to get rid of a vehicle just before its second shaken. I included 1,400 yen for paperwork and processing, 21,000 yen for vehicle registration, the one-time 10,000 yen recycling fee, two years of compulsory liability insurance, the weight tax, and normal repairs. And Tokyo is more expensive (especially for insurance and repairs) than Okinawa.

  • avatar
    CoreyDL

    I wonder what the best place is to get JDM type cars which are LHD for importation into the US.

    • 0 avatar
      bumpy ii

      The sales lot of someone who has already imported them into the US.

      Sure, you could go to Japan and bid on something yourself, but factoring in travel and lodging costs, knowing how the auctions operate, currency conversions, export regulations in Japan, logistics involved in shipping a car across the Pacific, importation regulations in the US, you’ll probably spend more doing it yourself for a single car.

      TBH, the easiest thing to do is stalk Vancouver-area Kijiji listings until something you like that is 25+ years old pops up.

      • 0 avatar
        CoreyDL

        Yeah you’re probably right. Good point.

      • 0 avatar
        luvmyv8

        While not LHD, a place has sprung up in Ontario, CA that is selling JDM imports that are legal under the 25 year law. I first saw them on Facebook and now ebay…. Vehicle Importers.

        The first cars were interesting, but nothing overly spectacular- a silver R31 Skyline 4 door with a CA18S (carburated!) with an automatic…. but it was clean. Also a ’87 Toyota Crown with a perfect blue velour interior, a cool ’89 Land Cruiser Turbo Diesel and they currently have a 1st gen. Toyota Soarer ‘Aero Cabin’. Also according to the site, they have some ’89 R32 GT-R’s coming down the pike…. tempting, but I love my Jeep too damn much.

        Also they have Sean Morris dealing with all the importing and legal crap, so I wouldn’t have qualms about going that way if I were to…. Sean was pretty much the non-corrupt part of MotoRex when they were importing GT-R’s over a decade ago. Should be interesting.

  • avatar
    dtremit

    Derek, I think you’re missing the link to the auction post on his site.

  • avatar
    wheeler

    Now if you really want to see a comparison of East vs West auto auctions, you want to go to China, a big new and dynamic used car market compared with Japan….
    No one has yet written about why Manheim invested so much in establishing itself there, only to pack up and leave just a few short years later. The contrast in auction culture, and culture in general, is enough to boggle the mind. It seems even Adesa has backed away, as if to say, “Don’t even go there”.

  • avatar
    chicagoland

    Would be strange is Japanese people stop buying new cars. The country will be dependent on US, and if more car sharing is the future here, Japan will have to find another industry to pay their bills.


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