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Saturday, December 10, 2022

Second Hand Toyota Car Prices Surge on Global Semiconductors Shortage

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The unresolved global shortage of semiconductors along with a broader supply chain disruption for parts and materials, particularly aluminium, is leading to a surge in the price of used cars like Toyotas.

Dealers in Japan say, if a brand new Toyota is ordered today, it could arrive in 13 months, if the customer is lucky.

Used car prices have increased about 30 percent in a year in Japan, but within that spike, older cars (7 – 8 years old, under 100,000km) now have a domestic value that they never could have had in the past.

This is what attracted SoftBank, whose $100bn tech Vision Fund backs Carro, a Singapore startup that implements AI to calculate the value of used cars.

Previously, used cars in Japan were mostly sold to emerging markets, where vehicle history matters less. (Last year 1.2 million cars were exported, with Russia being the main destination before the invasion of Ukraine.)

Last week, using Carro software, SoftBank mobile launched a service where customers looking for a used car can pay a flat subscription fee to lease and drive one.

The AI ​​adapts the rate to the specifications, prices and history of the required cars; the main challenge is matching used cars with customers who were previously used to buying new.

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