Posts Tagged ‘uss’

USS Auction Data Points to Latest Trends In Japan’s Car Auctions

Posted by Stephen On Saturday, April 9th, 2011

USS is the largest car auction network in Japan and includes the largest single auction location in Japan – USS Tokyo. So figures from USS can give a good idea about trends at the Japanese car auctions in general.

First of all, the overall number of vehicles that passed through USS regular auctions dropped from 2,327,515 to 2,121,948 – a fall of 8.8%. This should not come as a big surprise, since through the majority of this period, the Japanese government’s EcoCar scheme was incentivizing drivers to scrap their old cars – cars which in the past would have passed from the dealers into the used car auctions. The removal of this EcoCar scheme has also resulted in a dip in new car salesĀ  in Japan, as people scrambled to take advantage of the incentives while they were still being offered that then caused a drying up in demand after this program was completed.

Interestingly, the “hit rate” for vehicles sold when auctioned went up from 57.7% to 64.2%, which hints at sellers lowering their price expectations and accepting lower offers for their vehicles than they would have previously. Whereas earlier in the current recession, car sellers were holding out for higher prices and were preferring to see their cars fail to sell so that they could get another chance the following week, now it seems that they are beginning to realize that the market cannot support their higher expectations and so they are moving their reserve prices down in order to achieve quicker results.

Although the earthquake affected results in the latest quarter, the lower numbers of vehicles passing through the USS auctions in the disaster-affected areas was not too far out of line with declines in numbers at other auctions far from the epicenter. USS Tohoku experienced auction cancellations, but was still running at 65.9% of the previous years Q1 numbers. This was still higher than USS Saitama, for example, where the equivalent number was 58.8%.

Now, although we have extrapolated some overall market trends from these USS figures, it is important to remember that USS is just one auction group in Japan. It may be the biggest, but that does not mean that its results necessarily reflect the whole market. It may be that sellers have been moving away from using USS to putting their cars in other auction groups’ auctions.

And before we get too pessimistic about declines in overall numbers, it is still worth noting the sheer scale of these figures: The USS auction group alone processed 2,121,948 vehicles in a period of one year. This is a bit of a guesstimate, but I would not be surprised if that meant that the overall number of used cars auctioned in Japan in this annual period was somewhere between 3.5 million and 4 million units total. How’s that for choice?

Source: USS Co. Ltd.