Dealer seeks to connect car buyers to live Japan auctions

A Tokyo-based used car dealer has opened shop in Kenya and is betting on an online portal that connects buyers directly to Japanese car auctions to drive sales.

JPC Trade has established its regional hub in Mombasa and says it is banking on technology to link Kenyan second hand car buyers with Japanese online auctions for better deals by cutting out middlemen.

Prospective car buyers are required to sign up at the dealer’s website – www.jpctrade.com – which gives customers an opportunity to access and browse data from more than 100 Japanese car auction showrooms, JPC Trade said.

“We offer very competitive prices given that customers have an opportunity to directly source from Japanese auctions. There are no middlemen,” said Stella Koech, the Kenya country manager for JPC Trade.

Ms Koech said the firm is a member of the Japan Used Motor Vehicle Exporters Association (Jumvea) – the industry lobby – which should give comfort to buyers that it is a genuine auto dealer.

“There should be no worries about losing cash,” she said adding that customers seeking to import used cars from Japan should always cross-check with Jumvea to confirm the status of the dealer.

JPC Trade entered the Kenyan market mid last year after acquiring a small car importing business set by Dismas Ogeke, a Kenyan student studying in Japan.

The dealer plans to open its Nairobi office later this month and another in Dar-es-Salaam by the end of year. It currently has a staff of seven.

Kenya’s expanding middle class and an increased access to credit facilities is whetting the appetite for Japanese used car dealers seeking to exploit Nairobi’s penchant for Tokyo’s second-hand cars.

JPC Trade said it hopes to ride on its direct online link to live car auctions to take on rival dealers operating in Kenya such as IBC, SBT, Tradecarview and JapanTradeCar.

The Kenyan embassy in Tokyo has at multiple times warned importers of used vehicles to be aware f phoney online companies that disappear after receiving payments from unsuspecting customers.

The criminals are said to be using computer graphics to create Internet advertisements that display their banners over pictures of stolen vehicles or those photographed from other dealers’ yards and at auctions, the embassy warned.

Buyers are required to deposit a 10 per cent deposit on cost and freight after identifying the car they want before they are allowed to place an online bid to the Japanese car auctions, JPC Trade said.

The balance is paid after a successful bid. JPC Trade charges an agency fee of between Y30,000 to Y50,000 per order for saloon cars, depending on their capacity.

Even though the company is strictly a used car trading company, JPC Trade makes arrangement for customs clearing and car registration for Kenyan customers.

The Business Daily set out to compare the savings offered by direct bidding for used motor vehicles using the JPC Trade platform versus using ordinary dealers.

We identified a 2009 Toyota Corona Premio with a mileage of 105,000 kilometres, which had a successful bidding price of Y559,000. The total cost of bringing this car to Kenya including freight, taxes and registration amounted to Sh1.1 million.

Toyotsu Automart, a Nairobi-based second hand car dealer, for example, quotes the price of a 2008 Toyota Corona Premio with a mileage of 108,357 kilometres at Sh1.67 million.

Ms Koech said the online portal allows buyers to view the auction sheet of every car on sale. The auction sheet is coded using multiple parameters that describe the state of the car on offer.

For example ‘A’ means a scratch, hence A1 is a tiny scratch of 2-3cm. C means corrosion, S (rust), U (dent), (AU) scratch and dent, W1 (repainted as good as new) and X indicates part exchange required.

The cars are also graded using a number between 1 and 6 where 6 means a car less than 36 months old and is as good as new and 1 being a write-off that can only be harvested for parts and scrap.

Furthermore, R means an accident vehicle which has been repaired while RA implies a minor accident vehicle.

“Many Kenyans have been sold R cars but they are not aware. It is not visible to the eye unless you see the auction sheet,” said Ms Koech.
“It does not mean these cars are faulty, but they cost less compared to other grades,” she said.

JPC Trade also lauds the online auction platform saying it shows buyers the true mileage of a car. Many Kenyans have reported falling prey to a Nairobi syndicate that resets odometers of imported used cars to reflect lower mileage so dealers can fetch higher prices.

“The online platform brings transparency so the buyer clearly sees the condition and price of the car he/she is buying,” said Ms Koech.

JPC Trade said it supplies vehicles to 15 car dealers in Nairobi and three in Mombasa as well as to individuals.

Ms Koech declined to reveal how many cars they ship in every month, but said volumes depends on the season.

However, she said the new excise tax regime that took effect in December last year has slowed down imports of saloon cars, which now face higher taxes.

In contrast, buyers of used luxurious fuel guzzlers are having a field day as the excise duty has dropped by half.

JPC Trade also serves regional markets such as Uganda, Tanzania, Rwanda and South Sudan.