Japanese used vehicle exportingJapanese 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.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]Due to progressively escalating costs of passing the mandatory periodic vehicle inspection, cars are typically scrapped or exported for sale abroad by the time they are about 10 years old. Engines removed from scrapped vehicles are in some cases exported for sale outside of Japan.[citation needed]Nearly 1.4 million used vehicles were exported from Japan in 2006.[citation needed] The most popular destinations for used cars from Japan are Bangladesh, Russia, Mongolia, Kazakhstan, Trinidad and Tobago, New Zealand, Tanzania, Zambia, Malaysia, Australia, Congo, Ireland, Pakistan, Dominican Republic, Peru, Bolivia, Paraguay, Kenya, the United Kingdom, Thailand, Myanmar and (until recently) the Philippines. Additionally, Chile, Singapore, South Africa and the United Arab Emirates are used as popular transit hubsOverviewSupply of used carsIn 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 methodsVehicles 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 Agriculture and Forestry (MAF)[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 differencesThe suitability of Japan's domestically sold cars for export to other countries is constrained by various factors. Vehicles in Japan have right-hand drivethe driver's seat is on the right side of the vehiclein 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.[citation needed] 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.[7] 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.[8][9][10] They often lack structural reinforcements needed to meet side-impact crashworthiness standards in effect outside Japan.[9] Moreover, entire categories of vehicle, such as Kei cars, do not exist in regulations outside of Japan.[11][12]ResponsibilitiesThis section does not cite any references or sources. Please help improve this section by adding citations to reliable sources. Unsourced material may be challenged and removed. (May 2011)

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 verificationWhilst the vast majority of websites in Japan are of genuine business companies, but it is also a fact[citation needed] that online scams and fraud are alive, well and very big business in Japan. It is very important for foreign importers to verify each company and to not send money until full satisfaction. Verification of each Japanese companies under "Japan Company Trust Organization" can also be helpful.

High duty, inflation push down used car import

Import of reconditioned motorised vehicles plunged by more than 46 per cent to 6,700 units during the period of January-June this year, compared to the corresponding period of 2011, according to customs statistics.

Local automobile traders imported 12,500 units of cars during January-June last year

High import duty and discouraging car financing by banks were the main reasons behind such a big drop in imports, automobile traders told the FE.

"We're paying around Tk 1.6 million in duties on import of a Nissan car-bluebird-and its price at the retail level stands at Tk 2.6 million or more," said Abdul Hamid Sharif, a senior car trader and leader of BARVIDA (Bangladesh Reconditioned Vehicles Importers and Dealers Association).

The local market of reconditioned cars witnessed the biggest boom in the country's history in 2009, when more than 38,000 units were imported thanks to a surge in bank finance and the buying spree by the emerging upper middle class in the city.

However, prices of the 1,500cc used cars-Toyota Corolla-dominating the sales have increased to around Tk 2.2 million from Tk 1.5 million two years back.

"The overall deteriorating situation in different trade and manufacturing sectors is also driving down the sales," he added.

Habib Ullah Dawn, a former president of BARVIDA, said the people in the middle income bracket were the main buyers, adding: "The purchasing capacity of the middle income group has declined in the recent time mainly due to high inflationary pressure."

More than 80 per cent of Bangladesh's imported cars are reconditioned or used cars, mainly sourced from Japan and used by the middle income group.

The stock market debacle also affected the auto sales, he added.

Banks earlier financed up to 80 per cent of the value of a car. Now the maximum limit for financing is 50 per cent.

According to officials at the two car carriers-NYK and Everest, a ro-ro (roll-on/roll-off) car carrier arrives in Bangladesh in every two months.

Traders use both Chittagong and Mongla ports for import of used and new motorised vehicles.

A car carrier's capacity is more than 1200 units and carrying less than 60 per cent of their capacity is not economically viable for them.

"We're carrying even 50 per cent of the capacity upon the request of importers. Earlier, we used to make at least one trip a month with 800-900 units of cars," said an official at the Everest.

The import of used cars fell 38 per cent to 19,823 units in 2010-11 from 32,225 units of the previous fiscal year, according to the BARVIDA statistics.