Japanese used vehicle exporting

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A Japanese-market Honda Stepwgn in the Philippines. The model has never seen an official release in the country, and has to be converted to left-hand drive for it to be driven legally.

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 since the 1980s.

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]

Nearly 1.4 million used vehicles were exported from Japan in 2006.[citation needed] The most popular destinations for used cars from Japan are Pakistan, Sri Lanka, Bangladesh, Russia, Mongolia, Kazakhstan, Jamaica, Trinidad and Tobago, New Zealand, Tanzania, Zambia, Zimbabwe, Malaysia, Brunei, Australia, Canada, Congo, Ireland, Georgia, Dominican Republic, Peru, Bolivia, Paraguay, Kenya, the United Kingdom, United States, Thailand, Myanmar, Hong Kong and (until recently) Indonesia, Philippines. Additionally, Chile, Singapore, South Africa and the United Arab Emirates are used as popular transit hubs.[citation needed]

Overview[edit]

Supply of used cars[edit]

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[edit]

Vehicles which will be exported from Japan must be prepared before shipping. This includes de-registering 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 Primary Industries (MPI)[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[edit]

The suitability of Japan's domestically sold cars for export to other countries is constrained by various factors. Vehicles in Japan have right-hand drive—the driver's seat is on the right side of the vehicle—in 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.[7] 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.[8] 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.[9][10][11] They often lack structural reinforcements needed to meet side-impact crashworthiness standards in effect outside Japan.[10] Moreover, entire categories of vehicle, such as Kei cars, do not exist in regulations outside Japan.[12][13]

Responsibilities[edit]

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[edit]

Whilst the majority of websites in Japan are of genuine business companies, there are [1] scams and fraud in Japan. Foreign importers must verify each company, and transfer money only when transactions are satisfactorily completed. Verification of Japanese companies under the Japan Company Trust Organization can be helpful.

To specific countries[edit]

Canada[edit]

Any vehicle more than 15 years old may be imported into Canada without regard to its compliance with Canada Motor Vehicle Safety Standards. Vehicles are registered at the provincial level in Canada, and increasingly stringent sub-national vehicle safety requirements make it difficult to register a Japanese-market vehicle without replacement or modifications to the headlamps and other lights and reflectors, window glass, tires, seatbelts and other equipment.

Chile[edit]

In Chile, second hand imported vehicles may only be registered in the extreme regions of Arica and Parinacota, Tarapacá, Aisén and Magallanes. Japanese used vehicles must meet emission standards and be converted to left hand drive. However, a big market of non converted cars exists in the duty-free zone of Iquique, where customers from other countries buy them and sometimes drive them home.

Hong Kong[edit]

2002 Toyota bB, Japan Domestic version, exported and registered in Hong Kong.

There are quite a lot of used cars from Japan registered in Hong Kong, including both Japanese makes and even European makes, since both Hong Kong and Japan are right hand drive. In order to register the car in Hong Kong, the car must be less than 7 years old, gasoline powered, meets Euro V emission and noise standard, with E-mark for all glass and safety belts, and unleaded-fuel restrictor installed. For cars over 20 years old, they can be imported as classic cars and need not meet Euro V emission standard. In addition, Hong Kong does not accept privacy windows. If a Japanese used car is fitted with privacy windows, it must be converted to clear glass in order to register in Hong Kong.

Ireland[edit]

Ireland has relatively loose vehicle importing laws for Japanese cars. To keep imports down, Irish Revenue Commissioners require all new and imported cars to pay the VRT. Also, every car, both domestic and imported over four years old must pass the stringent National Car Test (NCT) in order to be given a road worthiness certificate. In the case of cars imported from Japan, all glass, tyres, noise, must meet EU approved levels.

Kenya[edit]

In Kenya, second-hand imported Japanese vehicles must undergo a worthiness inspection conducted by the Japan Export Vehicle Inspection Center as per mandate from the Kenya Bureau of Standards. The inspection aims to ensure that the vehicles are not more than 8 years old, are right hand drive, have genuine mileage and that the vehicles pass a safety & mechanical inspection similar to the Japanese periodic inspection.[14]

Macau[edit]

Although Macau is right hand drive, it does not allow imports of used car from Japan or any other country, unlike Hong Kong. However, brand new parallel imported cars from Japan are allowed in Macau.

Malta[edit]

Toyota ist, registered in Malta

In Malta, second-hand imported Japanese vehicles must comply with Road Worthiness regulations which address Emissions, Lights Operability & Mechanical Operability. Vehicles thus in compliance can be imported and registered. Some Maltese importers apply corrosion protection to these vehicles due to the hot, humid climate.

New Zealand[edit]

Nissan March Bolero, imported to New Zealand

New Zealand has stringent safety and emission standards. Besides biosecurity and customs clearances, a vehicle must be Entry Certified by a Transport Services Delivery Agent (TSDA) which includes checking that paper data and physical data meet safety, emissions, and fuel consumption standards.[15]

Pakistan[edit]

Pakistan applies strict controls on imports. Imported cars must be not more than 3 years old. High import taxes are levied on imported vehicles.[16] Special ships are sometimes used for exporting vehicles to Pakistan to meet the rising demand.[17]

Russia[edit]

While Russia has right hand traffic, it allows the importation of LHT vehicles if they pass the technical inspection. This is compulsory for all street-legal vehicles in Russia. Although a prohibitively high import tariff is levied on cars more than 7 years old, to protect local industry, the oldest Japanese vehicles usually pass the inspection, if they were well maintained. Vehicles imported to Russia are sometimes exported to North Korea and Central Asia.

United Kingdom[edit]

Importing rules for the UK are stringent. All vehicles must undergo Individual Vehicle Approval to assure compliance with applicable ECE Regulations or British national equivalents. The speedometer must be converted from kilometres per hour to miles per hour, a rear fog light and unleaded-fuel restrictor installed.

United States[edit]

Vehicles at least 25 years old may be imported to the US regardless of non-compliance with that country's Federal Motor Vehicle Safety Standards.[18] Vehicles are registered at the state level in the US, and increasingly stringent sub-national vehicle safety requirements make it difficult to register a Japanese-market vehicle without replacement or modifications to the headlamps and other lights and reflectors, window glass, tires, seatbelts and other equipment.

References[edit]

  1. ^ "Opening Statement by Prime Minister Junichiro Koizumi at the Press Conference on the Passage of the FY2003 Budget". 2003-03-28. Retrieved 2008-10-14.
  2. ^ "Japanese Used Car Exporting - Inspection Sheets". Japan-used-car-exporting.info. Retrieved 2011-05-30.
  3. ^ "Japanese Used Car Exporting - Auto Auctions in Japan". Japan-used-car-exporting.info. Retrieved 2011-04-03.
  4. ^ "Importing Motor Vehicles". DAFF. 2010-10-11. Archived from the original on 2011-03-31. Retrieved 2011-04-03.
  5. ^ Other Imports | MPI Biosecurity New Zealand Archived December 21, 2007, at the Wayback Machine.
  6. ^ Considerations for Approval of Lighting Equipment on Vehicles Imported to Canada, Daniel Stern Lighting Consultancy, 2006, pp. 6-7
  7. ^ "LTO, Customs to strictly enforce EO 156 ban on 'surplus cars'". Top Gear Philippines. 15 February 2013.
  8. ^ Perspective on Proposed Changes to Vehicle Import Regulations in Canada
  9. ^ Stop the 25-year rule
  10. ^ a b 15yo ADR-ing — Part 1
  11. ^ 15yo ADR-ing — Part 2
  12. ^ 63 FR 33913 U.S. Department of Transportation Final Rule
  13. ^ Can America Find True Happiness in a Microcar?
  14. ^ Import Regulations (Kenya)
  15. ^ http://aretcars.com/export-import-regulations/
  16. ^ Import of Vehicles, High Commission for Pakistan
  17. ^ "Leading News Resource of Pakistan". Daily Times. 2005-08-07. Archived from the original on 2011-06-07. Retrieved 2011-04-03.
  18. ^ http://www.nhtsa.gov/cars/rules/import/FAQ%20Site/pages/page2.html#Anchor-28852