Foreign buyers turn up the heat on competition for Japan's used cars

Foreign buyers are driving up competition for Japan's used car market, taking advantage of the yen's historically weak exchange rate. As the yen's value has plummeted, Japanese cars have become more affordable for overseas buyers, with prices dropping by up to 30% compared to just five years ago. Auctions featuring used cars from top Japanese manufacturers, such as Toyota, Honda, and Nissan, have seen an influx of foreign participants, accounting for 30% to 40% of the attendees.

Bidding wars have intensified, with vehicles selling for prices reaching up to 1 million yen ($6,400) per car, despite the auctions being expensive. Japanese cars are renowned for their quality and reliability, making them a popular choice among foreign buyers. In late July, the yen reached its lowest point against the US dollar in five years, causing a significant decrease in the cost of purchasing a Japanese car for foreign buyers.

Japanese car dealerships are feeling the impact, with some having to raise their average selling prices by up to 15% in the past one to two years to compete with foreign buyers. The weak yen has also led to rising prices for other used goods, such as smartphones, luxury bags, and secondhand clothing, further altering the cost of everyday life in Japan.