Japanese used-car dealer Idom is partnering with Uber on African sales targeting drivers contracted with the American ride-hailing company.
Operations get rolling this month in relatively stable Tanzania, whose roads accommodate Japanese-made vehicles with steering wheels on the right. Idom’s catalog will be made available at Uber registration centers. Only drivers signed up with Uber will be able to buy them.
Idom, the company behind the Gulliver chain in Japan, will select vehicles from among its 10,000 back home to export. It will always have dozens in stock in Tanzania. Prospective customers will have a chance to inspect the cars.
The vehicles will have less than 10 years and less than 100,000km under their belts in Japan. They will include station wagons, minivehicles and even hybrids. Prices will come in around the equivalent of 500,000 yen ($4,700).
Auto ownership in Tanzania is said to be limited to a handful of affluent people, with many of the vehicles then lent out to drivers for ride-hailing services. Because loans are not widespread in that market, Idom is also joining forces with local banks to provide two- to three-year financing for such drivers.
Idom hopes to have the business span at least 10 African countries in three years, aiming for 50 billion yen in annual sales.
Used Japanese models are vehicles of choice for importers in Africa, thanks to their excellent condition and reliability. Some 240,000 used vehicles were exported from Japan to African nations last year, Ministry of Finance data shows. This is more than double the tally from a decade earlier, giving Africa a global share exceeding 20%. Because the statistics do not reflect vehicles costing 200,000 yen or less, the real numbers are even higher.
Used-car imports into Africa often involve vehicles won in auctions between Japanese dealers. Selling directly to drivers through Uber will enable Idom to keep prices down and position itself as a trusted seller.
Idom also operates Gulliver dealerships in the U.S. and elsewhere that offer used cars procured in Japan. Tanzania will be the first market where the company offers exclusively exports from Japan. Success in Africa could open the door to similar operations in other regions, such as emerging Asia.
Source: Nikkei Asian Review