JDM Auction

The experience of going to a major used car auction in Japan is an experience you will never forget. It is the epitome of our high speed, "the more the better," internet, technology and information age.

There is something very charming and quaint about the old fashioned way of having an auctioneer speaking a hundred miles a minute, driving the car out on the floor and auctioning it off, but those days have long since gone as far as these auctions are concerned.

The sheer immensity of some of these auctions is hard to wrap you mind around. HAA Kobe has 7-8,000 cars running through the computer screens in its auction halls every Saturday. USS Nagoya has about 9,000, and USS Tokyo has an astounding and unprecedented 15,000 cars EVERY Thursday.

This is not Yahoo Auction or E-bay. All the cars listed are actually physically on the premises with very few exceptions. It makes transport and access easy for the buyers to check out their prospective treasures to be won. Without a purpose in mind, the average person having only a mild interest in cars could spend all day getting lost in the car lots of HAA Kobe.

Becoming an Auction Member:

Becoming a member of these auctions is a moment of pride and accomplishment for all aspiring car exporters in Japan. Once membership has been attained, then the exporter is considered to have "made it" in the business. The most basic requirement is that the person or company has a used goods trading permit. Also, a prospective member must have been in the car business for at least 2 years and have documented proof of a certain number of car sales. This number varies from auction to auction. A few years ago the number was 50 for HAA Kobe. This creates quite a catch 22 for the exporter because without a membership it is so much harder to actually achieve the required number of sales. Along with these requirements an aspiring auction-goer must acquire 2 references from current members.

Before even parking the car, you get a feeling of anticipation as the immensity of the place you are about to enter hits you. HAA Kobe is located on the waterfront near port island. Cars can be loaded and unloading next to the parking lot if need be. Cars are parked outside as far as the eye can see, and there is a huge 8 story parking garage for foreign cars and some other specialty cars. It bombards your senses as you drive up.

Walking through the gate, auction goers are greeted by friendly smiling attendants as they show their member badges and enter the premises. My first time, I was greeted by the shiny red glow of a 2002 Ferrari Modena. This was of course what caught my eye at first, but as I looked around I realized that all of the high end cars were right here at the entrance probably so that they could keep a better eye on them and also so that first time visitors like myself could be sufficiently star-struck. Bentley, Porcshe, Mazeratti, Hummer, Mercedes Benz, BMW, and of course Ferrari were all lavishly represented.

Next is going into the building where the auction is being held. The auction halls are located upstairs. When you enter, you go by the front counter and pick up about a kilogram of paper in the form of various car lists. Now you are ready to enter the room where it all happens. It is a barrage of loud beeps, techno music and a computerized woman's voice saying things in Japanese like, "Sold!"

There are several auction halls of varying sizes. They have the feeling of a University lecture hall. The largest one at HAA Kobe must seat about 300-500. On the third floor there is a smaller reserved auction hall for the high rollers. Each seat consists of a nice soft comfortable movie-theatre style seat, with a small desk, a screen, a card slot for the member's bidding card and 6 bidding buttons for each car that is on the line. At any one time there are 6 cars up for bid.

Auction members planning to buy a car usually check online the day before or the morning of the auction. By midnight (the morning of the auction), 95-99% of the cars are listed. Every Saturday morning there are last minute additions and those are released in the form of a list that is either passed out later on in the auction, or on the bottom floor at the building entrance where the rest of the lists are given out.

There is also the option of simply going off the lists that are provided as you enter the building. Most of the people going this route are those that do not have a membership and are coming as a guest.

The paper lists provided on the ground floor, include complete descriptions of a car's auction number, model name (in Japanese), brief (optional) description such as "leather," "Limited Edition," "turbo," etc., engine and chassis number, shaken expiration, kilometers, color, and condition of the car.

Cars are rated on a Scale of 0-5. Five means the car is in new or practically new condition. A good car at the auction is a 4. It will have only minor, if any mechanical problems and the body will have only minor scratches and dings in it. A good interior of course is a must in a car with a rating of 4. A car that is a 3.5 has some kind of mechanical problem or a noticeably blemished exterior or interior. A 3 will have some major mechanical or cosmetic problem, oftentimes more than one. It is very rare to see a 1 or 2. A 0 can mean that a car is in seriously bad shape or that it was in an accident that required body work. The final bid on a 0 will generally be considerably lower than a car from 3-4 of the same make, model, and kilometers.

Online listings are much more extensive. Cars are listed by make with all the above information. There is also the option to click on a car's auction number to see all of it's details. Generally, when viewed in this manner, the curious party will see a front and a rear picture of the car along with a scanned copy of the auction sheet. Just about all information one could possibly want about the car is on this sheet. The grade sheet consists of the information on a car disclosed by the seller AND the auction company's inspector's appraisal of the car. Car auctions throughout the world are notorious for not disclosing problems with a car. This also happens in Japan, but the occurrence of this is far less frequent than in other countries.

Anyone who has been admitted to the auction may inspect any car on the premises from the outside. The lower ticket item cars are generally left unlocked with the key in the ignition. In this case the person looking at the car may start it up and inspect it in any way that they wish (barring damage to the vehicle). Bringing a flashlight,

Swiss Army knife, CD and/or tape, and something to keep your clothes and hands clean are all good ideas to make the most of your inspection.

People with member badges or guest passes may obtain keys for locked cars at designated areas throughout the yards. In exchange for the badge, the person wishing to view the inside of the car gets the key and may proceed to start it and follow through with a full inspection. Looking under the hood, checking under the car for rust, and oil leaks, and testing all the electrical components is an obvious plan of action as well as starting up the car and running it until it is up to temperature.

Once the car has been inspected, and the bidder is satisfied with the results of the inspection, it is time to place a bid. At the front of the main auction list, is an approximate time-table for when cars of specific auction numbers will come up during the day. This allows people to know when they need to be in the auction hall to make a bid. For a fee, it is also possible for members of many auctions to place a high bid online without actually having to go to the auction.

The bidding process is simple. Each auction member is given ONE auction bidding card. The bidder places the auction card in the slot and watches the 6 screens in wait for the car to be bid on. A picture of the car and the copy of its auction sheet are shown on the screen along with the current bid price in the lower right corner. The bidder continues to press the button until his high price has been passed or the car has been won. No one can bid against themselves so it is safe to keep pushing until the high bid has been surpassed. There is one exception to this.

If the reserve price has not been met then the computer will bid against any would-be-buyers until the reserve price is met. If the bidder is smart and doesn't fall for the automated price inflation and keeps the bid lower than the reserve price, a car goes to what is called "Shodan." This means the high bidder of a car that has not met its reserve may make an offer to the seller. The seller has a choice to either accept or let the car go unsold. Bidder and seller may go back and forth trying to deciding the price and/or if the car will actually be sold or not.

If the reserve price is met and a bidder has the highest bid, then a red button next to the bidding card flashes and beeps. In order to confirm and win the car the bidder must press this button.

Once all the cars that a bidder has wanted to try to buy have come up, it is time for check out. The auction card is swiped downstairs in the lobby and a print-out of all the cars that have been won is made. If a winner wishes to drive a car off the lot then he or she must go to the front desk and ask for the claim ticket. At HAA Kobe this is usually a green copy of the auction sheet which is hanging on the inside of every car for identification and inspection purposes. The new owner of the car then drives the car to the gate, hands the green ticket to the attendant, and is now free to enjoy the spoils.

Every auction has a slightly different flavor, but all of the major auctions follow a similar format. People wishing to see one of these auctions up-close and personal should find an auction member to take them in as a guest. Happy car hunting!