Integration of car dealers

As a channel to distribute their own cars, car manufacturers own shops under exclusive distributor contracts. These dealers sell new cars and provide maintenance services to their customers. Until sometime around 1990, depending on the marketing areas, customer segments, car categories, etc, these shops were following the distribution channels the manufacturers had set. For example, Toyota had 5 different distribution lines and each shop was specialized in:
・Toyota Shops: luxury cars such as the Crown and the Celsior
・Toyopet Shops: middle-class cars such as the Mark Ⅱ and the Corona
・Vista Shops: middle-class cars such as the Vista
・Corolla Shops: low-end cars such as the Corolla
・Netz Shops: compact cars such as the Vitz
Among the shops above, the Vista shops are now closed and changed to the Lexus shops.

Because Toyota has 30 – 40 new models of cars on the market at the moment, it is　impossible for one salesperson to have the product knowledge of all the cars; so by grouping their cars, Toyota was selling their cars from each shop specialising in a certain channel. Nissan, Honda, Mitsubishi, Mazda and other Japanese car manufacturers were also using this channel dispersion strategy.

However, following the bubble's implosion around 1990, sales of new cars has started to decline and the manufacturers have restructured and integrated some of their dealers. Because dealers are individual companies in their own right, so the manufacturers carried out the restructure slowly, respecting the dealers’ own business; but after the Lehman shock, the situation is getting worse. Not only the dealers, but the manufacturers are also having a hard time, which is accelerating the restructures now.

There are a few car dealers around our office but the nearest Toyota Netz shop was closed the other day. As for Nissan, when I rang the usual dealer to inquire about renewal of insurance, I got a recorded message saying that the office had been shifted to another area. When I rang the new number, it was connected to another Nissan shop nearby. I asked for the person I have been dealing with and according to him, the manufacturer is now looking at quick integration and his shop had to be integrated with this shop at the end of last month. Both dealers were separate companies, so he is now treated as a contractor but soon will be transferred. A harsh reality, isn’t it?
For us, the worst thing this kind of integration can cause is that, even if with the same manufacturer’s signboard, they do not always share their policies and price system; sometimes we do not continue to receive the same service. For example, a dealer only charged JPY 10,000 as a fee for a renewal of insurance but his new shop might charge JPY 12,000. Some may not do a free maintenance service before the change of ownership. In most cases, the conditions turn worse for us. This is because the new dealership would consist of new mixed employees and systems who will have to follow their old rules faithfully and recheck their costs and raise their prices.

Each car manufacturer and dealer now has to decide what to do to survive in this ever shrinking market in Japan.


★ Japanese used car stock : http://jpctrade.com/stock/index.html
★ JPCTRADE Home page : http://jpctrade.com/
★ JPCTRADE Blog : http://jpctrade.blogspot.com/

(Editor)
JPC TRADE CO.,LTD.
3B YS-Building, 1-2-2 Botan, Koto-ku, Tokyo, Japan
Japan Used Motor Vehicle Exporters Association (JUMVEA)
TEL : +81-3-5245-7731
FAX : +81-3-3643-4955

What to do after having a car for 11 years or more: buy a new one or keep the current one?

I remember writing about vehicle inspection systems in Japan and other countries in my mail magazine. To make sure that each vehicle in each country is complying with their own safety standards, it should be done regularly and every car needs to pass one to be on the road.

It is easy to understand the framework of the inspection but how much does it cost? In Japan, it is expensive. I think the compulsory insurance we have to pay at every inspection (Shaken) is necessary but the cost for the weight tax charged by the weight of a vehicle is too much.

You know, 80% of the money goes to specific revenue sources for road construction projects. Thinking that local politicians create unnecessary road works to drop money to their electorate, I cannot accept that… Oops! It is a bit off my subject.

So, how much do you think it is going to cost you if you keep a car for 11 years in Japan? I tried to estimate the cost for a petrol car and a hybrid car. The engine size of them is 1.5L. Say if they have to go through Shaken 4 times and get rid of it without getting the 5th one. The cost of deregistration and profit from resale are not included because it depends on the condition of the cars.

Other conditions include: annual mileage as 5,000km, cost of fuel, considering a bit of usage incurred by things such as air-conditioners, as 14km/L for a petrol car and 25km/L for a hybrid car, cost of petrol at US$12.50/L, cost of car parks as US$100/month, cost of compulsory insurance as $450/year for a petrol car and $500/year for a hybrid car, thre changes every 30,000km, oil change every 10,000km and US$100.

If the cost of a new petrol car is US$16,520 and US$22,190 for a hybrid car, the total cost of maintenance is estimated as US$38,419 for a petrol car and US$36,762 for a hybrid car. The average annual maintenance cost is US$3,492 for a petrol car and US$3,342 for a hybrid car. A hybrid car is only slightly cheaper but at the annual mileage of 5,000km, there will not be much benefit in the fuel costs.

As a conclusion, whatever car you have, it costs more than 5 million yen to keep a car for 11 years and it costs twice as much for maintenance than the cost of purchase. Because the budget for car maintenance is limited, to reduce family spending, getting rid of a car seems the best way.

However, if you buy a car cheap through JPC, you can keep the cost of purchase low. So, please think about using our service.


★ Japanese used car stock : http://jpctrade.com/stock/index.html
★ JPCTRADE Home page : http://jpctrade.com/
★ JPCTRADE Blog : http://jpctrade.blogspot.com/

(Editor)
JPC TRADE CO.,LTD.
3B YS-Building, 1-2-2 Botan, Koto-ku, Tokyo, Japan
Japan Used Motor Vehicle Exporters Association (JUMVEA)
TEL : +81-3-5245-7731
FAX : +81-3-3643-4955