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

Tokyo Motor Show 2009 (2)

This is the second issue on the Tokyo Motor Show.

After checking the Toyota, Nissan and Mitsubishi booths, I moved to Honda’s booth. As I was walking, I noticed a big display hanged from the ceiling which said “Make something that has never existed”. It looked promising.

I also saw many people disappearing into the space surrounded by those display boards one after another. Within a second or two, their show started. It was about a future city with hybrid and electric cars. The theme was a bit uninspired but when the human-shaped robot “ASIMO” came out half-way through and started dancing with people, I quite enjoyed it.

Next, I moved to Suzuki’s booth. The main attraction there was the launch of their staple car “Alto” with a new concept. The main changes are the new large meters, user-friendly floor shifts, larger luggage compartments, etc. To show the differences, they displayed the first generation Alto next to the newest model to make the evolved one look more attractive. However, I was too busy looking at the beautiful model coming on & off in front of the old model who was the most or the second most beautiful among all the models at the motor show. To be honest, with her rather classical appearance, the contrast between the classic Alto and modern beauty, the old model looked more attractive with the girl as the title of the Suzuki’s legend car.

I checked Mazda, Subaru and Daihatsu after that but they all had similar displays of hybrid and electric cars as well as small demonstrations; was not really impressive. Because of the recession, imported car manufacturers decided not to participate in the show, the size of the show was about half of the last show and only attracted about the half number of people.

To me, the most interesting thing was the exhibition of the 30th anniversary of Japan Car of the Year. From the first winner Mazda Familia to this year’s winner the Prius, they were all on display and they all brought back memories. “Yes, I’ve seen this car!”, “Oh, my friend who had this car looked incredibly happy when it won the Car of the Year”, “Yes, I borrowed this car from an older friend to take a girl out”, etc. There were so many things that came up in my mind.
There were more things there such as Yamaha and Harley Davidson motorbikes and parts manufacturers’ booths but I was running out of time so I quickly checked them.

Most manufacturers were concentrating on eco cars like electric cars, not flash in size and display, the whole show was less costly and eco-friendly. We could clearly see that there would be a big change from petrol cars in the near future. I love cars but I felt a bit worried if there are going to be any attractive hybrid / electric cars come into our life. What do you think?


★ 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

Tokyo Motor Show 2009 (1)

Last Sunday, I went to biennial Tokyo Motor Show. From past experience, I decided to leave early to get there at 9:30 and have a look at the main booths while it is less crowded.

Before leaving home, I checked the train schedule and calculated the time so that I could get there at 9:30 but the train I was on had trouble. I had to wait for 20 minutes on the train, so I only got there around 9:50.

When I got there, I went straight to Toyota’s booths. They had a Lexus and a Toyota booth next to each other. In the Lexus booth, they had their new super car “LFA” for the first public display in the most prominent spot. Its maximum speed is 325km/h and the price is eye-popping at US$375,000.

At the show, Toyota’s president Mr Akio Toyoda was saying “We tested it on a race circuit so many times even down to the sound of the exhaust. This is our super-sport car with the taste of Lexus.” This was his baby. He was there from the early stage of the development. The numbers produced is limited to 500, so this is a real premium car. During the world recession, I wonder how they go.

Another main product from Toyota was the “FT-86”, nicknamed as “Hachi-roku” (eighty-six in Japanese) and a remodelled popular old car “AE86”. We still get orders from some customers in Europe and although they are more than quarter of a century old, you can hitch JPY 1 million at auction if it is in a good condition. They are still popular. At the show, it was displayed next to the Lexus LFA. When I got there, it was already crowded with people, so I decided to go back later and forgot to take a photo of it. (Damn!)

Usually Toyota had some kind of show, spending quite a bit of money using a famous model or young actor but this year they had none. As well as these cars, they had a Prius, a next generation plug-in hybrid car and an electric car on display. It was just a quiet show booth for display only.

Then I checked the Nissan booth. They had a similar size booth as Toyota but they, too were only displaying their cars. According to the TV, there was going to a demonstration of the car crush using their new safety technology but the staff member there told me that they could not finalise the development in time for the show so they canned it. Sad… The only thing to mention was two GT-Rs, which were the main attraction at last year’s show, were in display next to each other so we could see the the length of the last two years. There was no stage show or anything and less there to see than Toyota’s booths, I quickly walked away.

I also checked the Mitsubishi’s booth next to the Nissan’s. They were having a stage demonstration of their new electric car “i-MiEV”. They are confident that this car will sell. This is an electric car we can actually drive on the road and by showing that you can even charge the battery using a household power outlet, they were making an appeal suggesting a new lifestyle taking the car into everyday life.



★ 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

Which car breaks easily?

When we buy a car, one of the worrisome points is what sort of services are included in their warranty. When we buy a brand new car in Japan, they usually come with two different manufacturer warranties at the manufacturer’s dealer’s: 1) General Services: 3 years after the first registration (or under 60,000km) and 2) Special Services: 5 years after the first registration (or under 100,000km).

General Services apply to almost everything including electrical components for free repair. Special Services are only for the engine, transmission and other major components and of course the repair is free. Imported cars such as Mercedes Benz, BMW and Audi usually covers everything within 3 years of the first registration (no millage restriction).

Like this, when you buy a new car, you get all the protections so you can relax but there is no set guarantee for second-hand cars. Normally, if you buy them from a dealer, they provide their own services under their own policy which set the time and mileage as they choose. So, as you can guess, the limitations of warranty vary depending on the dealer. On a 5 year old car or a car with the mileage more that 100,000km, there will not be any warranty from the manufacturers, nothing will be covered for repairs and of course there is more chance of having something go wrong than brand new cars. I personally think that each manufacturer should report their failure rates for the cars past their warranty time but apart from when they do a recall, I have never seen such information. Each manufacturer makes great effort in design and production so that their cars will not have a break down within the warranted time (5 years after the first registration or under 100,000km) but after that, their ways of thinking are different between them.

This is more obvious when you compare the policies between Japanese cars and imported ones. For Japanese cars, compared to imported ones, as you know, it is not so likely to have a breakdown or a problem which requires a repair even if you have it for a long time. Even if your car needs a parts change or repair, it is carefully designed so that you can change parts easily. For example, to change the battery, it is well placed so that you can take an old one out easily but in some imported cars, you require a special tool and need to remove the bits and pieces around it before you take the battery out. Some imported cars have really complicated layouts. Also, for a simple parts change, where if it is a Japanese car you only need to replace a rubber part, for some imported ones they require a whole shaft assembly change where the rubber part is attached. Sometimes for a similar repair, the cost can be 10 times more than fixing a Japanese car.

However, even Japanese cars, well-known for their hardiness, are only machines. They do break. So which models break more easily? Makers never publicly report this (or they might just not have the data) but the other day I asked the insurance company we always use. Here you go. Insurance company disclose these data as much as possible to car dealers to draw our attention and reduce customers claiming insurance.

(Failure rate ranking)
1) Mitsubishi Delica Space Gear (PD6W, PD8W, etc)
2) Mitsubishi Chariot Grandis (N94W)
3) Mitsubishi Lancer (CE9A, CP9A, etc)
4) Nissan Largo (W30, NW30)
5) Nissan Skyline (R33 series, R34 series)
6) Nissan Primera (P11 series, P12 series)
7) Subaru Legacy (BH5, BE5)
8) Nissan Gloria (Y33 series, Y34 series)
9) Toyota Harrier (SUX series, MCU series)
10) Mazda MPV (LW3W, LW5W)

Some cars listed here include the ones which had problems as a car going on the road, sport cars which went through too many conversions and not in the original states at all, and of course the drivers’ bad driving habits also play a part, so please do not judge the cars on this list as bad: but if you are buying a car now, please check this list to choose the best one for you.


★ 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