A Look At A Japanese Auto Auction And What It Holds For The Future

Derek Kreindler
by Derek Kreindler

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.

Derek Kreindler
Derek Kreindler

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  • Corey Lewis Corey Lewis on Jun 11, 2014

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

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    • Corey Lewis Corey Lewis on Jun 12, 2014

      @Corey Lewis Also can't find them on Ebay.

  • Dtremit Dtremit on Jun 11, 2014

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

  • Wheeler Wheeler on Jun 11, 2014

    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".

  • Chicagoland Chicagoland on Jun 11, 2014

    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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