must-know-things-to-buy-cars-from-japan

Once search engine provides you the list of export companies you will be surprised how many Japanese exporters with different specialization offer you variety of services and car lists.

It is quite hard to identify what will be suiting you best. And reason is not only on your preferences but the approach Japanese exporters take when they offer their services. Each of exporter has its strength and weakness, size of funds and personnel, add-on services and exclusive dealerships.

But for all of them there is one thing that they have in common. It is source of cars i.e. where they get cars to sell you, to sell abroad.

Depending on source of cars there is difference in their service, price and customer support.

Basically there is 3 major sources where companies get cars:

  1. Used Car Auctions
  2. Local dealers (Japanese Showrooms)
  3. Distributors

Based on access to above sources and their relationships export companies offer 3 general type of services, 3 things you should know to identify before buying car from Japan:

  1. Auction Agent Service.
  2. Retail (Stock)
  3. Dealer Stock

Auction Service.

Auction service is a public service when export company behaves as an agent in Japan for a customer to Japanese Car Auctions, Yards, Ports, Vanning Sites. Due to the restriction for foreign and Japanese individuals to buy cars directly from Car Auctions and lack of proper license, lack of language skills, problems with parking/storage places etc. only the legal entity properly registered in Japan can acquire memberships to bid/purchase/check/auction cars . Thus export company offers agent/middle-man service to foreign customers and represent him in every step instead. Sometimes an export company provide its service even to local Japanese customers who do not possess a licence.

Agent service usually means when an exporter charges you certain amount of money on top of auction buy price and arrange all Japan-side issues: buying car from auction, transport to yard, custom clearance, arrangement of shipment and sending export documentation.

90% of export companies provide this service. Usually for small companies it is the only service they can do. Because to carry out this service requires minimum investment and it is almost risk free business style for Japanese exporter.

With this service exporters usually get minimum profit. The reasons are that there is high competition on this service, exporter heavily depends on customers activity for search and analysis of cars. There is huge dependence of market price. Nearly all fees are fixed. Investment for sales staff to communicate customers regularly. Openness of business process to end customers. Customers understand how things are done and almost know real costs.

Retail (Stock)

Retail or Stock service is a public service that offers to abroad customer cars that already in possession of Japanese Car Exporter. Unlike to Auction service where the period before final payment the car still considers property of Car Auction or Car dealer/owner.

Basically it is list of cars that are located on the exporter yards. These cars has extra detailed information and photos on condition, grade and pricing. Usually stock cars listed on the exporter website and regularly distributed by emails or messages, posted in Social Network and promoted by phone calls.

Stock cars is powerful tool and shows how company is rich and financially strong. To keep stock requires strong buying management and it is very costly for exporter. Exporter purchases cars on its own risk, and whether it will be re-sold quickly depends on how sensitive buyers on current market trend, customer demand, and how rare are models.

Again to have stock is very costly. Exporter has following costs to keep stock:
- purchase cost
- tax costs
- auction fee
- transportation
- documentation
- inspection
- daily yard costs
- repair costs

That's why stock cars are never cheap and have always extra profit to cover all costs and get margin. Exporters sell stock cheap only of following reasons:
- repair costs is too high
- car bought long time ago
- natural disaster damage
- shortage of funds for buying new stock
- seasonal or regional promotions
- buying wrong model
- cancellation of car by initial client
- drastic change of import regulation for target market

But exporters never sell expensive, luxury, rare or fresher (younger than 5-7 years) car cheap. Only exception is when investors or founders force company in order to get quick cash.

The reason big exporters do not sell these type of cars cheap or in minus is because their major income comes from these cars. Therefore Stock Cars is what can make Exporter rich or make it bankrupt.

Smart management on Stock cars made small companies becoming global exporters (SBT JAPAN, BE FORWARD, AUTOCOM, NICHIBO, HEIWA etc.). The same way mistakes on stock can put big companies to the knees or disappear (AUTOSQUARE, TOKI-DOKI, TRUST, KOBE MOTORS etc).

Dealer Stock

Dealer stock is what recently becoming very trendy among small and big exporters. Dealer stock is simply the process of renting car lists from smaller companies in Japan or car lists from abroad for further reselling to end customer.

It is win-win-win business style. Where owner of the car happy that they gained new advertising platform almost for free, exporter in Japan claims it has stock bigger in numbers and there is opportunity for extra income, end customer is happy as well because he don't need spending time to search and negotiating each exporter.

In terms of costs, owner do not loose anything by offering own car list to exporter, the exporter faces almost no costs on distribution or promotion of stock list. However for end customer it will end up on paying extra commission or higher FOB price where the profit of exporter is also included.

For budget cars the extra charge usually is $100-300, for rare cars, truck, heavy machinery is around $1000-10,000 extra costs. Of course many end customer in the end do not really know what is actual price of the car. This part exporters keep secret and majorly the most important thing they negotiate with car or list owners.

Dealer stock is becoming popular among global exporters, who hold all knowledge, information, local connections, smart logistics, big volume of customers. They simply becoming a trading platform. In future according to our information this form of business style is directed to remove car dealers in target market so that their end user customers could buy cars directly from Japan exporter. It is not a secret that big margin comes not at Japan side but at local side where are cars are sold to end users in designated markets. Therefore big companies every day dream to take this piece of pie under their control.

How to identify dealer stock is very simple.

First, if you notice huge number of cars on the website, more than 10000-15000 units. It is 100% that this company doing dealer stock. Over 10000 units stock car holder is hard to find because even Japanese auctions themselves has no more than 5000-15000 cars per day listed. Where we should consider that almost 50% of that is just re-selling units from previous weeks.

Secondly, dealer stock is usually has different identification number, it varies from native ID or REC in numbers, symbols and tracking style.

Thirdly, check the background photos of the car stock. If it is different what you usually see like: car photos from public or private parking lots, not port area behind, show room background, different company logo on the car, unusual locations of the car, etc, you watching dealer stock offer.

Fourthly, it takes time for sales manager to give you immediate information on the car, not as usual. Basically all sales managers has access to the condition, extra photos of their own stock car from their CRMs or inventory software right away. However as per dealer stock, they need to request information to original owner and it takes quite a time to feedback, 1-3 days.

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