What you MUST Know before Buying and Importing a Japanese Car Online

8-April-2012

Over a period of two years, Jacob Mulinde saved Shs 8 million to buy a car. As soon as he raised the money, he went on the Internet to search for the best car deal in Japan.

His online search landed him on a website that promised to ship the car of his choice (a Toyota RAV 4) to Mombasa port within 90 days. Quickly, he mobilized US$3,000 and wired it to an account in a bank in Nagoya, Japan. Six months later, he had not received the car. His emails and telephone calls went unanswered. Mulinde realized he had been conned.

Mulinde is one of the hundreds of victims in East Africa, whose high demand for cheap Japanese vehicles has led the region’s market to be targeted by unscrupulous internet-based motor vehicle scams.

The public has been warned against dishonest individuals who are exploiting internet marketing and advertising to lure unsuspecting car buyers from Uganda, including senior government officials.

Last month, the Kenyan Embassy in Japan posted a notice warning its nationals back home about the motor vehicle fraud.

“This Embassy has recently been inundated by requests from many Kenyans seeking assistance to recover monies allegedly paid to unscrupulous Japanese Companies for the purchase of second hand motor vehicles,” the notice said.

“Potential vehicle importers should be extremely cautious before ordering a motor vehicle from Japan via Internet.”

Japan is the major supplier of used and reconditioned vehicles for the East African market and for years Ugandan car importers have done business with Japanese counterparts without a problem. But while Japanese car dealers were previously known as trustworthy and reliable, this may no longer be the case as the business in Japan has been invaded by criminals.

Shah Saftainshah, the general manager of Cosmos (U) Ltd, said most unsuspecting victims of these fraudsters are individuals who want quick and seemingly cheap online transactions.

“With all the car importing companies available for Ugandans, why would individuals opt for online businesses?” Shah wondered. “Most of us deal with honest and well-known partners in Japan. Why would someone decide to do business with people they have no idea about?”

What has made it worse is that most victims have been suffering in silence, and this lack of publicity has served the fraudsters well, assuring them of more opportunities to defraud other unsuspecting victims without the fear of detection.

Efforts to track down the fraudsters often prove fruitless as they disappear immediately they sense danger - telephone numbers changed and e-mail enquiries unanswered.

Since the transactions are mostly conducted on-line, there is often no physical address for office or even a sale yard. The vehicles displayed on their websites are merely pictures taken from some legitimate yards or vehicle auctions. They then use computer graphics to display their banners over the fake yards or the cars themselves.

The bank accounts to which Ugandan victims have wired money are also phantom, opened solely to receive fraudulent payments within a particular period of time, then closed. Usually, they are in fake names, the identities untraceable.

After engagements with local police, government departments and the Japan Used Motor Vehicle Exporters Association (JUMVEA), the Kenyan Embassy found it almost impossible to trace the criminals due to legal technicalities in Japan. One such is that fraud is treated as a civil matter that must be filed by expensive lawyers in Japan, which most Ugandans cannot afford.

Before buying a Motor vehicle online, potential car buyers are advised to check http://www.jumvea.or.jp/, the JUMVEA website, to verify if the online vendor is a legally registered and known business in Japan.

Upheaval

The car racket in Japan partly owes its success to the recent upheavals that affected Japan’s economy and hurt car manufacturing and export. Shah said the market was greatly affected last year by the Tsunami and subsequent nuclear explosion, which shut down some car manufacturing plants and slowed exports.

“We were greatly affected by the Tsunami. Car imports were very low and expensive. Some importers stopped operating. Even now, the situation is not yet stable,” Shar said.

This, combined with the appreciation of the Japanese yen, a global economic slow-down and appreciation of the dollar against the Uganda shilling, made vehicle imports - even second-hand – more expensive, and the business less profitable.

This has meant lower profits for local car importers, and an increase in illegal exports that include stolen vehicles, illegally rebuilt units or even re-modeled vehicles.

“The car market has gone down with the increase in the dollar rate,” says William Owomujuni, a car importer in Kampala. “The rate of importation of cars is low compared to that of last year. The percentage of car purchases has gone down by as low as 40% and this is not good for our market.”

Aaron Kinyera from Autorec Enterprise Ltd said business had become slow as a result of the dollar’s rise since last year.

At Cosmos (U) Limited, the rate of importation is moderate. Even with the dollar rate, the company is able to import 50 - 100 vehicles per month.

Market watchers say the troubles in Japan may force car importers to start warming to Europe, especially the UK, which has high quality but more expensive cars. How they would fare on the Uganda market, time will tell.

By Karien Mukama: The Independent Newspaper