Japan is projected to lose nearly $2 billion due to its decision to include used vehicles in its ban on car exports to Russia, according to trade data and market participants cited by Reuters. The ban, which came into effect in early August, prohibits the sales of all but subcompact vehicles to Russia and has cut off a lucrative sales channel for secondhand Toyotas, Hondas, and Nissans for brokers and smaller ports. Initially, Tokyo had banned the export of luxury vehicles to Russia in April 2022, and an additional prohibition on sales of heavy trucks was added in June.
Japan has long been a major exporter of used cars, but the ban on car exports to Russia has dealt a significant blow to the industry. The country’s requirement for mandatory inspections has significantly increased the maintenance expenses for these vehicles, making new car acquisitions more financially attractive. Prior to the Western-imposed sanctions on Russia over its military operation in Ukraine, sales to Russia accounted for over a quarter of Japan’s used car exports.
The average price for secondhand Japanese vehicles has reportedly surged to around $8,200 by 2022, more than double the price in 2020 when Russia accounted for about 15% of Japan’s used-car exports. Furthermore, nearly 150,000 used Japanese vehicles entered the Russian market in the first eight months of this year, representing half of the country’s total imports of secondhand automobiles, according to figures from the Russian analytical agency Autostat.
The ban on car exports has had a significant impact on Japanese companies that focused exclusively on exports to Russia, with losses amounting to nearly 70%, according to Olesya Alekseeva, a logistics coordinator at SV Alliance. Element Trading, a used-car dealer in Niigata prefecture, has seen its share of business in Russia decline from a peak of above 50% to below 20%, according to the CEO Wataru Nishiwaki.
Preliminary data from auto auction house USS indicates that the number of used cars for sale in Japan has seen a substantial year-on-year increase of over 20% in August, while average vehicle selling prices have experienced a 7% decline. The decline in prices has benefited local recyclers, such as battery recycling firm 4R Energy, according to Nissan Leaf CEO Yutaka Horie.
In conclusion, Japan’s decision to include used vehicles in its ban on car exports to Russia is expected to cost the country nearly $2 billion. The ban has had a significant impact on Japanese exporters and has led to a surge in used car prices in Japan. While the ban has posed challenges for the industry, it has also brought benefits to local recyclers.
Source link
