Japanese used vehicle exporting

Japanese used vehicle exporting is a grey market international trade involving the export of
used cars and other vehicles from Japan to other markets around the world.
Despite the high cost of transport, the sale of used cars and other vehicles to other countries is
still profitable due to the relatively low cost and good condition of the vehicles being purchased.
Contributing factors to the feasibility of such export include Japan's strict motor-vehicle
inspections and high depreciation which make such vehicles worth very little in Japan after six
years, and strict environmental-protection regulations that make vehicle disposal very expensive
in Japan. Japan has very stringent vehicle emission test standards.[1]
Due to progressively escalating costs of passing the mandatory periodic vehicle inspection, cars
are typically scrapped or exported for sale abroad by the time they are about 10 years old.
Engines removed from scrapped vehicles are in some cases exported for sale outside of Japan.
[citation needed]

Nearly 1.4 million used vehicles were exported from Japan in 2006. [citation needed] The most popular
destinations for used cars from Japan are Bangladesh, Russia, Mongolia, Kazakhstan, Trinidad
and Tobago, New Zealand, Tanzania, Zambia, Malaysia, Australia, Congo, Ireland, Pakistan,
Dominican Republic, Peru, Bolivia, Paraguay, Kenya, the United Kingdom, Thailand, Myanmar
and (until recently) the Philippines. Additionally, Chile, Singapore, South Africa and the United
Arab Emirates are used as popular transit hubs
Overview
Supply of used cars
In Japan, used cars are mainly sold at auto auctions by car owners and dealers. At auto auctions,
owners are hidden from bidders while the auctioneers provide independent car evaluations called
inspection sheets.[2] Exporters, acting as bidding agents for importers, use the auto auctions as
their main supply.[citation needed] There are over 200 auto auction groups operating throughout Japan
including JAA, JU Group, TAA, USS, and ZIP.[3]

Besides auto auctions, Japanese exports have access to vehicles from dealerships and private
sellers.
Exporting methods
Vehicles which will be exported from Japan must be prepared before shipping. This includes deregistering the vehicle with the government, getting an export certificate, and cleaning the car to
remove biosecurity risks. Car cleaning is especially necessary for the Australian Quarantine and
Inspection Service (AQIS)[4] and New Zealand's Ministry of Agriculture and Forestry (MAF)[5]
agencies' clearances.
Exporters can ship the car that is ready by ro-ro or container according to customer specification,
ship schedules, and the capabilities of the destination port.
Market differences
The suitability of Japan's domestically sold cars for export to other countries is constrained by
various factors. Vehicles in Japan have right-hand drivethe driver's seat is on the right side of
the vehiclein accord with Japan's left-hand traffic. Some countries with right-hand traffic
permit right-hand drive vehicles, though right-traffic headlamps are generally unavailable for
models exclusive to Japan.[6] Some countries with right traffic do not allow right-hand drive cars,
but in some such markets the extensive labor required to convert a car to left-hand drive is
economically feasible; such conversions are sometimes done by the local importers. The
Philippines is an example of a market where such conversion is common, until recently, when
the importation of such used vehicles (except for heavy vehicles) was banned by E0 156. [citation
needed]

Japan's automobile safety regulations also differ substantially from the ECE Regulations

used throughout most of the world and the U.S. North American regulations that apply in the
United States and Canada.[7] Vehicle components such as windows and windshields, seat belts,
lamps and reflectors, and mirrors, as well as design features for crashworthiness such as
bumpers, fuel tanks, and structural rigidity of vehicles meant for the Japanese market may not
comply with non-Japanese standards.[8][9][10] They often lack structural reinforcements needed to
meet side-impact crashworthiness standards in effect outside Japan. [9] Moreover, entire categories
of vehicle, such as Kei cars, do not exist in regulations outside of Japan.[11][12]

Responsibilities
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removed. (May 2011)
Generally, most exporters are responsible for the organization and completion of the vehicle's
transportation until it arrives at the importer's Port of Destination (POD). At the POD, possession
of the vehicle, and the responsibility of possession, is laid on the importer. Financial
responsibility, on the other hand, is transferred when ownership is handed over. Ownership is
switched after the car has been purchased and before being exported. In the case of damage or
losses occurring during shipping, the buyer is the one bears all financial loss.
Car export companies verification
Whilst the vast majority of websites in Japan are of genuine business companies, but it is also a
fact[citation needed] that online scams and fraud are alive, well and very big business in Japan. It is
very important for foreign importers to verify each company and to not send money until full
satisfaction. Verification of each Japanese companies under "Japan Company Trust
Organization" can also be helpful.

High duty, inflation push down used car import

Import of reconditioned motorised vehicles plunged by more than 46 per cent to 6,700 units
during the period of January-June this year, compared to the corresponding period of 2011,
according

to

customs

statistics.

Local automobile traders imported 12,500 units of cars during January-June last year
High import duty and discouraging car financing by banks were the main reasons behind such a
big

drop

in

imports,

automobile

traders

told

the

FE.

"We're paying around Tk 1.6 million in duties on import of a Nissan car-bluebird-and its price at
the retail level stands at Tk 2.6 million or more," said Abdul Hamid Sharif, a senior car trader
and leader of BARVIDA (Bangladesh Reconditioned Vehicles Importers and Dealers

Association).
The local market of reconditioned cars witnessed the biggest boom in the country's history in
2009, when more than 38,000 units were imported thanks to a surge in bank finance and the
buying

spree

by

the

emerging

upper

middle

class

in

the

city.

However, prices of the 1,500cc used cars-Toyota Corolla-dominating the sales have increased to
around

Tk

2.2

million

from

Tk

1.5

million

two

years

back.

"The overall deteriorating situation in different trade and manufacturing sectors is also driving
down

the

sales,"

he

added.

Habib Ullah Dawn, a former president of BARVIDA, said the people in the middle income
bracket were the main buyers, adding: "The purchasing capacity of the middle income group has
declined

in

the

recent

time

mainly

due

to

high

inflationary

pressure."

More than 80 per cent of Bangladesh's imported cars are reconditioned or used cars, mainly
sourced
The

from
stock

Japan

market

and

debacle

used
also

by
affected

the

middle

the

auto

income
sales,

he

group.
added.

Banks earlier financed up to 80 per cent of the value of a car. Now the maximum limit for
financing

is

50

per

cent.

According to officials at the two car carriers-NYK and Everest, a ro-ro (roll-on/roll-off) car
carrier

arrives

in

Bangladesh

in

every

two

months.

Traders use both Chittagong and Mongla ports for import of used and new motorised vehicles.
A car carrier's capacity is more than 1200 units and carrying less than 60 per cent of their
capacity

is

not

economically

viable

for

them.

"We're carrying even 50 per cent of the capacity upon the request of importers. Earlier, we used
to make at least one trip a month with 800-900 units of cars," said an official at the Everest.
The import of used cars fell 38 per cent to 19,823 units in 2010-11 from 32,225 units of the
previous fiscal year, according to the BARVIDA statistics.