History of used car auction development

History

For some time after the war, cars were still considered valuables with quotas and were used until they were about to be scrapped. Therefore, there was no used car market and related businesses.

The formation period of the Japanese used car sales industry can be traced back to the 1950s. Following the economic recovery from around 1955, the general consumer became the center of the automobile industry, and as the number of customers purchasing cars for the first time increased, sales of new cars increased sharply. In the 1960s, the used car distribution system was not yet in place. There was no stable used car purchasing route for dealers at that time.

New car dealers' target was to sell as many units as possible, so the trade-in system was invented. The owner of the used car could bring his car to the new car dealer and with some additional payment purchase the new car. Thus the new route of used car distribution was opened. Thus the used car broker was born. The broker earned a profit by having the new car dealer throw the trade-in car in a pile and reselling it to the used car dealer.


Used car distribution model in 1960s.

During that time Toyota Company along with new Toyota cars sales wanted to control of the used Toyota market as well, so in 1955 TOYOTA USEC company was established. In the beginning, it purchased used cars from brokers and re-sold them to end-users.



Later in 1967, Toyota Usec Co.,ltd created and held the first in the history of Japan used car auction, be replacing the Broker's function.

The first auction in Japan TAA- Toyota Auto Auction produced by Toyota Usec.



In the 1970s, used car dealers began to establish trade unions in various places to improve the image of the industry as a whole. In 1971, JU (Japan Used Car Sales Association) was established, and modernization of the entire industry and unification of trading practices were promoted. As a result, used car auctions centered on unions have begun to be held mainly in overcrowded areas near metropolitan areas. As a result, inventory is exchanged between peers through auctions on the purchasing route of used car dealers. Later JU becomes one of the largest auction groups itself.

The difference of above describe used car auctions from the current ones is that old-style auctions didn't make a profit. Auctions were we connector between the new car dealers and used car dealers.

In the 1980s the situation has been changed. 1980s-The rise of corporate auctions- In the 1980s, there was a movement of external companies to enter this market, regarding the operation of this used car auction itself as a business. This is the birth of a "corporate auction". Auctions started to make a profit.

In October 1980, Aichi Automobile General Services Co., Ltd., was established and later renamed USS Co., Ltd. USS stands for Used Car Systems Solutions. In 1982 USS launched its first auction in Nagoya with 255 vehicles. Now the USS is the biggest auction system in Japan.

The disadvantage of the described auctions was that the dealer had to physically present at the auction site. The situation has changed in the late 80s, when several companies, that provide distance access to the auction emerged.

In 1984 the AUCNET Co., Ltd was established, which used information technology to provide distance access to used car auctions. This was the revolution in the sphere of used car auctions. In the beginning, AUCNET delivered laser discs recording video information of exhibited vehicles to member stores every week by the auction date (currently using satellite distribution). Then, on the day of the event, the members sit in front of the auction terminal and share the member stores nationwide while referring to the information confirmed in advance. 30 Participated in the auction raising competition. The real-time auction signal was sent to the Aucnet center via NTT's ground line. The company's TV auction had an epoch-making feature in that participants could participate in the auction as if they were watching TV while in the store. The TV auction spread the trading partners all over the country at once. The number of exhibits has increased, and at the same time, the variety has increased. Also, since you don't have to go to the venue, you can participate in the auction even on weekends when business negotiations are crowded.



Another novelty by AUCNET was the unification of the car technical inspection by introducing auction sheets.

USS auction didn't provide the access to the AUCNET and in July 1995 introduced Sattelite TV auction. Later in June 1997, another IT company AUTO SERVER (ASNET) offered remote access to the used car auctions.

A big role in used car auctions development has played the increasing number of "Kaitori ten" (companies that purchase cars from the population and re-sell them in auctions). There are three main characteristics of the purchasing industry. One is a franchise 15 is a large-scale store development directly managed. Looking at the major purchasing companies, we have an average of more than 300 stores. The second is that it has its own assessment criteria for used cars. Gulliver and other purchasing specialists such as T-UP are developing their own valuation systems. The third point is to introduce an information system as soon as possible and emphasize cooperation with auctions.

Gulliver International Co., Ltd. (abbreviated as Gulliver) was established in April 1994. This company specializing in purchase used cars and re-selling them to auctions. It is a start-up company that was listed on the Second Section of the Tokyo Stock Exchange in 2000 and was listed on the First Section of the Tokyo Stock Exchange in 2003. The reason why Gulliver succeeded was that he created a novel business model in which used cars were not sold at the exhibition hall and were sold at the auction hall within 1 week to 10 days after the purchase. Conventionally used car stores have "inventory risk" and "exhibition cost" due to having an exhibition hall 5 will be done. On the other hand, Gulliver has made the low-cost operation possible by reducing "inventory risk" and eliminating "exhibition cost".

Following this tendency, Toyota Automaker opened T-UP and Nissan Automaker opened KAUZO, both companies specializing in used car purchase and selling those cars in their own auction sites. Manufacturer-based purchase specialty stores have several characteristics. The first is to use the manufacturer's brand and take a nationwide multi-store development strategy. For example, T-UP currently owns more than 600 stores nationwide, and Kauso also has around 200 stores. In this respect, it can be said that it is exactly the same as a purchasing specialist such as Gulliver. On the other hand, in order to reduce the selling price of used cars 20 In recent years, there have been some manufacturer-based purchase specialty stores that sell purchased items directly to users without going through an auction. In the case of Toyota, the cars purchased at T-UP are resold to end-users through 1750 Toyota-affiliated used car dealers U-CARS distributed throughout the country. Nissan-affiliated used car dealers also have more than 1000 sales bases. Consumers search for their favorite cars by region via the Internet and individually request quotations and test rides.

In 2008 USS opens a purchase store called Rabbit, that submits its cars to USS auctions.

While talking about used car business development one should mention "Car Sensor" was originally published around the 1980s as a used car information magazine operated by Recruit. The first system in Japan to provide information from a personal computer since 1993 (Carsensor.net) was created, and after that, as a pioneer of used car search site, used car search site I have continued to lead. Currently, the number of registered vehicles is 300,000 and it is possible to narrow down the search according to the desired conditions from various perspectives such as vehicle name, price range, body type, and features.

Another boost for the development of used car auctions, become the increasing number of used car exporter companies, like ours'.

Some oldest used car exporters:

Heiwa Co.,ltd- 1966

Yamagin Co.,ltd- 1978

Royal Trading- 1987

Trust Co.,ltd- 1988

Daiwa Corporation- 1992

SBT Co.,ltd- 1993

Nikkyo- 1995

Nowadays there are 130 used car auction sites in Japan and 1 to 1,5 million cars per year are being exported to other countries.