Contract w/ Benz (Can't sell to Japan?)
 

I am sure many of you are aware that recently Mercedes-Benz has began to include in the sales contract that you may not sell a newly purchased vehicle (particularly AMG's) in Japan until at least one year after the purchase. Supposedly, the vehicles hold strong value in Japan and MBZ would be taking a significant hit if its vehicles were to be re-sold in Japan for a profit to their US customers and a loss to the company itself. This is a curious concept and I was wondering if any of you would be able to enlighten me further on the subject. More specifically, if anybody has any information regarding the Japanese car market and/or sales realm, your input would be greatly appreciated. Thanks!

What you just asked is exactly what my family does.

The concept applies to almost all high-line vehicles. Customs at most Asian countries will not allow the entry of a vehicle that is less than 12 months old.

Local importers that have been authorized by their parent companies lose a lot to such "imports" which affect their local sales. So parent companies (like Mercedes Benz in your example) has joined the effort to prevent such capitalism.

As an example, a BMW 316 (yes, that's a 1.6-liter) costs the equivalent of $71,236 in a certain country.... so importing a brand new $40,000 330i and reselling it for the same $70,000 yields an easy $30k just like that.

The funny thing is that the 316 is far less equipped than that of the cheapest 323 here in the US. Moreover, you can sell the $70k 330i for more because people bid for it. We sold a 330i for $90k just last year - even after we've used it for 6 months.

If you want to be in this type of business, you should be far well connected in the country where you plan to export US vehicles to.

BTW - such capitalism is completely legal... it is just difficult to do... i.e., altering the emission systems and engine to accomodate the local gas that is of less quality (and costs $7/gallon!)

Yeah, I had never heard of such thing till I bought my car in February. I was told that it would easily fetch over $100,000 in Japan. I thought it was for two years though not one. The retail on a new e55 in Japan is about $125,000. A cl65 is only about $255,000 lol.

Here is a japan a price list in yen, just go to xe.com and convert it.

http://www.mercedes-benz.co.jp/e/news/2004/0701.html

Thanks so much for the info guys. Your help has been greatly appreciated. For any of those who have more input, keep it coming! thearle, you've got a PM.

When I buy cars from MB of Honolulu, they ask you to sign a seperate contract saying you will not export the car for one year. There are a lot of Japanese customers here in Honolulu that keep cars for a year and take them back to their home country.

I've attempted to ship cars back to Hong Kong, but because the drive is on the opposite side, they don't seem to hold their value. Similar to how grey market 360s take a hit here in the US.

Actually most NON-EXPORT agreements apply to more than just exporting to Japan...

When I was in college my roommate and I 'almost' started a business buying used, customized Harley Davidson bikes in the states with the thought of reselling them in Japan (demand was killer back then w/ bikes selling for 2-3x US values). What we found out was that the import duty was simply prohibitive - even on a USED bike (manufactured in the USA), promising to make it less than profitable venture when all things were considered.

If you're planning on trying to make money doing this I'd think twice... I can't see the competition being anything less than fierce...

~ Ian

Exactly a few other good reasons as to why this is very difficult. To overcome such import duties (I mean to lessen, not eliminate), you will need creative minds to come up with creative ideas.

Just like anything else, there are loopholes. Example...

One is to send the vehicle back there with a "returning resident" status. A returning resident (one who migrated here in the US then retires in their home country) is entitled to bring home one vehicle for a minimal import duty.

His/her car can be then *transferred* after a year of his/her local ownership, from the date that the vehicle is legally documented... for a price definitely worth the effort and trouble.

*transferred* - meaning the vehicle has been paid for by the buyer long before the vehicle hit the local shores... and the vehicle is driven (or given to) its buyer regardless of the year's wait.

Wouldn't this scenario require that the ownership documents (ie. address, contact number, etc.) be identical to the identity of the original owner of the vehicle in the U.S.? There's no doubt that this is a complicated process.
Ian: My question is not regarding a prolonged financial pursuit, I am just interested in selling one specific car and figure maybe I can make an extra buck or two while I'm at it. :y