Anyone living in Japan who watches Japanese TV or reads Japanese newspapers will have been barraged with this news: Big Motors strange ..aka. illegal income methods. Golf balls and cars, what is their relationship in the used car market in Japan?
To increase their income, Big Motors Ltd who had a cozy relationship with Japanese car insurance companies, would intentionally damage customer’s as well as their own cars. If there was a hailstorm nearby, they simulated hail damage by using golf balls on cars, even on undamaged panels, then claim hail panel damage from insurance companies. They would rub a panel with sand paper so as to claim paint damaged panel claims from their insurance company. They would screw screws into tires and claim “tire compensation” from their insurance company to replace the tire. There is an online video of a branch manager showing the “correct way” to puncture the tire for a tire insurance claim. They also had a close relationship with the main car insurance company, Sompo Japan, so that little was done by the insurance company to research how genuine the claims were.
One law firm found in an investigation that of 45,000 panel beating and painting cases conducted nationwide by Big Motors in 2021, 2717 cases were randomly selected for examination of which 1,198 cases were suspected of engaging in fraudulent (i.e. golf balls and sand paper) activities. That’s more than 50%!
This is not some small insignificant used car dealership in Japan. Big Motors is THE top player in the used car Japan sales market with 15% of market share. This will impact cars prices in the used car auctions in Japan, but in what way?
Some analysists as well as myself think in a positive way (for we exporters and our overseas clients that is).
Trust in the used car market in Japan will drop for the Japanese public. Rather than buying a near new or used car from a car dealer in Japan, after this news, they may well rather buy a new car from a maker. This will decrease demand within the car auctions for the local market and push the prices down (good news for foreign buyers and used car exporters). Another impact of purchases of new cars will be an increase in traded-in vehicles into the auctions.
So perhaps the bad news for Big Motors is good news for the exporters and foreign buyers!