Since the escalation of the Russo-Ukrainian war in early 2022, Russia started buying up used cars from Japan in record numbers. However, Japan has since moved to bar most used-car sales to Russia.
Soon after international sanctions prompted many of the world’s largest car manufacturers to stop selling their vehicles in Russia, the demand for used vehicles from the Land of the Rising Sun soared. In fact, Russia accounted for more than a quarter of all of Japan’s used-car exports and the prices of these cars averaged almost $8,200, more than double the average price in 2020.
Figures released by Russian analytical agency Autostat reveal that over 50% of the 303,000 used cars imported into the country through January-August this year were from Japan. At one point, used car exporter SV Alliance was sending an average of 6,500 used cars to Russia each month but business is now down 70%. Why?
Read: Floundering Car Sales Point To Badly Deteriorating Russian Economy
Well, in early August, the Japanese government banned exports of all cars to Russia, except for subcompacts. This has left exporters scrambling to find places where they can sell vehicles, meaning they are increasing their focus on markets including New Zealand, Africa, and Southeast Asia. Vehicles that can still be exported to Russia include the likes of the Toyota Yaris and Honda Fit.
Japan first banned exports of luxury vehicles to Russia in April 2022 and recently added a ban on the export of heavy trucks. A director for automotive trade policy at Japan’s Ministry of Economy, Trade and Industry, Takanori Kikuchi, says the government is “watching to see what kind of an impact” the sanctions will have.
Reuters notes that mandatory inspections required for used cars in Japan encourages the sale of new cars. As such, Japan has become a giant among used car exporters and companies have thrived. Many of these exporters have been hit hard by the new bans, including Element Trading, which has seen the share of Russia in its business slip from over 50% to less than 20%.
