Anyone who doesn’t know now that there was a major earthquake, one of a magnitude not seen in modern history before, that hit Japan must be quite disconnected from information sources that flow around our globe! If this little blog here is your news source for this earthquake, then there was a very big earthquake that hit north eastern Japan that brought a lot of damage to buildings and infrastructure as well as a large loss of life. Our thoughts and prayers go out to the populations of Miyagi and Fukushima prefectures who were affected the most.
How does this earthquake affect our used car export business? Will the auctions now be “flooded” with “Tsunami cars” or “radioactive cars”?
First of all, the majority of cars sold in the used car auctions in Japan are sold outside of the areas. I do not foresee a huge impact on these auctions (CAA auctions, USS auctions, JU auctions).
Secondly, the 3 main ports used by Provide Cars in Japan; Osaka (Kobe), Nagoya and Tokyo are still operating. Osaka and Nagoya were not affected at all by the earthquake or by the tsunami. Tokyo’s port reported some cracks but no major damage to the infrastructure. Cars and vehicles stored on the ports were unaffected.
I do see some impact on supply and demand in the auctions however. Used car exporters combined purchase up to 40% of vehicles sold in the auctions each day, a significant amount that affects the prices of vehicles sold. I do foresee a pulling back (fear factor) of demand from overseas as people’s bias towards “tsunami cars” reduces importer’s customer’s demand. This will reduce the number of purchased vehicles in the auctions, effectively balancing reduced supply also to the point of perhaps lowering auction prices.
What should you look out for? Buying from exporters stock. Unfortunately, some exporters will jump at this opportunity to purchase cheap “as is, where is” tsunami damaged vehicles and then sell them off as “good stock”. That creates even more incentive to buy directly from auctions, vehicles that have been carefully judged and accessed by the in-between auction. KNOW WHERE YOUR VEHICLE IS COMING FROM.