Bizzare bazaar: USS and the used-car craze

Japan, Inc., May, 2004 by Lucille Craft

The auctions draw dealers not only from developing countries, but also from the UK and former British colonies, men of working-class backgrounds who share an infatuation with cars and the adrenalin-raising thrill of the bazaar. Back on the car lot, a portly Brit named Paul Shepherd, whose small firm trades about 150 cars a month, also orbits in a cloud of angst, but for entirely different reasons. He wants to discuss his case of "race discrimination": Filipina hostess clubs in his town have suddenly banned foreigners.

Steered back to the subject of cars, Shepherd is equally dour. He began dealing in motorcycles, exporting 600 a year from Japan at his peak nearly 20 years ago. When conventional distributors cut their retail prices, he had to shift to used cars, but now is looking at abandoning exports altogether to focus on the Japanese domestic market.

"We reckon in a few years the export market will die out," he declares. He turns on the ignition in a pickup and guns the engine. Then a "wow!" from another dealer draws him to the front of the idling truck. Water leaks in an ominous stream from below the cab. Shepherd shrugs.

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Exporting is becoming "more and more difficult," he says, noting that once-lucrative destinations have restricted imports of used cars from Japan or banned them altogether. "All the markets are closing up, so we're moving into the domestic market." He is trying to carve out a niche selling over the Internet to Japanese outside the major cities.

USS operates a cafeteria for dealers adjacent to the auction hall, and the men drift between the two areas throughout the day. Placid amidst the tobacco haze in the cafeteria, Motoaki Hirayama nurses a cup of coffee. He once worked supplying construction equipment for the U.N. When he received orders to Africa, he decided it was time to move on. Looking for a job that would exploit his English skills and exporting experience, he began dealing in used cars ten years ago. He now earns "two or three times" what he did as a salaried employee.

A popular model such as the RAV4 can be bought at auction for [yen]200,000 and sell abroad for four times that much. Even subtracting shipping charges ([yen]100,00 for a car, up to [yen]400,000 for a truck) and time-consuming paperwork, the fees are substantial, particularly considering the near-absence of barriers to entry. While Sajjad says a real business requires at least "two to three million yen" in startup capital and an office, many here start with little more than a cellphone, a place to sleep on the floor of a friend's apartment and a pocketful of dreams.

Japanese have considerably more career flexibility than a freshly arrived Pakistani, but for Motoaki Hirayama, the pure capitalism inherent in trading used cars is as alluring as the potential financial rewards. "With new cars, the distribution outlets are fixed. But the used-car market," he says, "is up for grabs."