A Marketing Revolution for Cars

~Giant Gulliver Landing in America~

Three years ago, in November of 2004, Japan’s largest used car business company named Gulliver managed to expand to America, which is said to have the concentration of one quarter of the cars in the world.

Companies like Toyota, Honda and Nissan are extremely well known as Japanese automobile makers. However, it does not seem that reports regarding the Japanese industry that handles the business of used car is known about much here in America at all. In Japan, when speaking of cars, along with makers like Toyota, Honda and Nissan, at the same time a company name that is associated with car distribution is that of Gulliver, which is very well known in Japan.

Their strength was given birth by a number of ideas that overturned the conception of automobile business that had existed to the present from top to bottom. And since those ideas have worked for the benefit of all those who buy cars and sell them, it may be expected that is the reason for the company’s rapid growth.

“You buy something cheaply and sell it at a high price. That way of thinking in regards to the distribution industry is a little out of date, you know. In the automobile distribution industry today, more than anything else, data is indispensable. How extensive is that kind of data that you have? That is what secures value in the distribution industry. Since the time of its founding, Gulliver has focused its energy in that direction.”

Speaking these words is Ash Suzuki, who was a member of the team that launched Gulliver USA, Inc. and came to the United States for that purpose and is at present acting as the manager of the USA region.

“For the past two and a half years we have also been compiling market data in America along with operating the business. Could the Gulliver business model work effectively in America as well? We analyzed the possibilities for the business from every possible angle. The result was that we are convinced that we have chance for success there. Based on data that we have collected up to now in America, we are now thinking of starting a full-fledged expansion effort in America.”

In advance of Gulliver’s projected full-fledged expansion into America, this publication has conducted its own independent investigation into the possibilities that exist.

Gulliver was established in Japan in 1994, so it may be said to be a business that is still in its infancy. However, ten years after that it had grown to include 500 branch locations throughout Japan, establishing an immovable number one position as an automobile company in the industry. What in the world had supported the rapid growth of the company during that period?

At the time that Gulliver was founded, it began operations exclusively buying cars. In Japan in those days, there were such things as new car dealerships where one could trade in one’s car and used car dealerships, that is, places where one’s car would be bought existed, but there were no companies that exclusively bought cars and nothing else. New car dealerships as well as used car dealerships were focused, first and foremost, on sales, so they ended up thinking about buying cars at the very cheapest price that could negotiated. However, Gulliver’s conception was different. The sales location (the place where the cars would be sold) would differ depending on the place and the time of the year. The important thing was to find that out and the first consideration was not thinking about selling that automobile as a used car by the company. In short, data is collected using a network in 13 thousand place throughout the country, it is analyzed and then cars are sent to the places were they are actually necessary. That is the Gulliver concept and the secret of why the system allows the purchase of cars anywhere at a high price.

And then, there is one more secret as to why cars can be purchased at a high price. This is likewise, as stated before, due to the enormous database on tap which makes it feasible for Gulliver to thoroughly cut the costs of storage management. At the typical dealership, once an automobile is purchased, until it is sold it must be stored by the company and taken care of, with all of the attendant costs, so that in the end the automobile cannot be sold at a high price. That is the state of affairs.

After Gulliver purchases an automobile, within two weeks it is no longer held in the company’s storage. This is a thoroughgoing policy. At the time that a purchase is made, in order to ascertain where the automobile is best delivered, within a two week period all of the paperwork is completed. Since storage management expenses are not incurred, the automobile can be disposed of without selling it at a high price. For that reason, it is possible to purchase cars at a high price.

Over the course of our investigation, we came to understand the meaning behind the words of Suzuki given at the beginning of this article. Truly, Gulliver proves that “the value of distribution industry company depends on the amount of its data” by putting it into practice and thereby has been successful in expanding its operations. What is more, this system makes both those selling cars and those buying them happy. Therefore, a wonderful “happy triangle” is achieved.

“Certainly, our humble company has created a system that allows us to buy cars at a high price and put them on the market cheaply. However, more important than that is naturally the hospitality that we keep in mind when dealing with our clientele. Many people tell us that trading in a car is a source of anxiety. You have to look for a place to sell it and then after actually selling the car, there are various kinds of paperwork that have to be taken care of that is extremely time-consuming and a bother. Gulliver completely eliminates that kind of aggravation for the customer by taking care of the paperwork regarding the sale of the car in the customer’s place.”

The car is purchased at a high price, while all of the various types of paperwork are completed in the customer’s name. The secret of Gulliver’s strength gradually became apparent to us.

“Now, our mainly business is purchasing cars that are used by over 10 thousand people per a year as free visit assessment service. We are needed to start new service by those people. For that reason, our humble company at this time is going to start a completely new service based on a conception that up to now has not existed in the automobile distribution industry. At the base of that concept is the plan to establish at Torrance, LA in the near future. This service is really original, and will change the automobile distribution industry. And this focuses on an advantage of consumer. We aim to make a full-fledged expansion into the American market and we believe that this service will surely make one of choice for consumer.”

In the next issue, regarding the company’s new service, we plan to publish a detailed article with interviews. Please look forward to that article next month.