Japanese used car dealer Carchs to launch China JV to sell to C. Asia, Europe
TOKYO, NNA - Japanese used-car dealer Carchs Holdings Co. Wednesday agreed with a Chinese partner to launch a joint venture in China to handle Japanese and Chinese used cars for export to central Asia and the European Union following this year’s easing of regulations on used vehicle exports from the world’s largest automobile market.
Qingdao SinTi Automobile Co. will be established in January in the Pilot Free Trade Zone in Qingdao, the capital of Shandong Province, to start the transshipment of second-hand Japanese vehicles to those regions by freight train while exporting used cars from China, a Carchs official told NNA Thursday.
The joint venture, Carchs’ first foreign unit, is owned 66.66 percent by Qingdao Hiking Automobile Trading Co., a wholly-owned subsidiary of the diversified business group Shandong Hiking International Co., and 33.34 percent by Carchs Holdings.
The local venture will sell Chinese-made used cars to global markets, starting early next year using know-how accumulated of the Japanese partner. It also aims to handle those vehicles for domestic demand.
The move comes after China in May essentially lifted restrictions on exports of used cars from the country. The Chinese market for used cars has grown. Unit sales of used cars in the country is estimated to grow 13 percent from the previous year to 14 million in 2018, about three times the level of five years before, another Carchs official told NNA.
In May, Carchs Holdings sold treasury stocks to Emminence LLC, a U.S. subsidiary of Shandong Hiking International Co., for 200 million yen ($1.8 million), allowing the company to hold a 4.2 percent stake in the Japanese company. Carchs expects the deal to help deepen their relations with the Chinese company, he said.