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JAPAN’s biggest used-car operation, which recently exited from owning auto retail dealerships in Australia, has refocused and expanded its technology subsidiary, IDOM Innovations.

The group has opened new premises in Melbourne and predicts growing success for its vehicle trading product, AutoFlip, that it now plans to take overseas.

AutoFlip, an online auction site for used cars that connects private sellers to dealers, now has 400 participating Australian dealers and in Melbourne alone for June showed almost 500 cars for sale.

IDOM Innovations is the Australian subsidiary of Tokyo listed company IDOM Inc. in Japan.

In the 2022 financial year it had revenue of $A1.47 billion and is capitalised at about $A1 billion. It evolved from IDOM Inc’s ownership of new and used-car dealerships in Australia that were sold in July via a management buyout.

IDOM Innovations, which opened in South Yarra this week, is supported by Invest Victoria and has partnered with Royal Melbourne Institute of Technology (RMIT) to work on future technologies including AI, internet of things (IoT), blockchain, user experience and augmented and virtual reality.

Its CEO Takayoshi Udagawa told GoAutoNews Premium that IDOM Innovations is the parent company’s corporate venture arm in Australia.

“We are creating and investing in the automotive solutions arena from Australia to expand globally. That’s our vision and to reach out over global automotive associations,” he said.

Opening the new IDOM Innovations centre, CEO Takayoshi Udagawa (left), with Japan’s consul-general Junji Shimada; Victorian treasurer, minister for economic development and trade, Tim Pallas; and IDOM president Yuske Hatori.

“The first step is to expand AutoFlip locally with several product enhancements now being developed and set to launch in the coming months.”

He said that increasing profitability for dealerships should start with the used-car departments but said it was vital that both the seller and buyer have transparency in pricing and vehicle condition.

“Japan and Australia each wholesale about 3.5 million cars a year but in Japan, 85 per cent of cars go through the auction process,” he said.

“In Australia, it’s only 10 per cent. Our new trading platform process can deliver the right price for the right car in the right condition. So it’s a transparent process and that’s what we are targeting for Australia.”

Mr Udagawa and his team built AutoFlip from scratch in September last year and in June recorded 2700 inquiries for the 650 vehicles listed in Melbourne.

“We are also expanding our B2B business and by the end of this financial year, have targeted a listing of 1600 cars with 1000 cars being bought each month,” he said.

“The target is that within three years, we will have 100,000 cars through AutoFlip and have a dealer network of 2000.”

He said that the outlook was so positive for AutoFlip that IDOM was now looking at white-badging the product for interested dealer groups.

“AutoFlip can be branded to a dealer and used on their website. We also see AutoFlip being of benefit to lease and fleet companies for vehicle disposal,” he said.

“For disposal, they can start the process one month before the vehicle needs to be sold.”

He said one of the major benefits of AutoFlip was its ease of operation. Mr Udagawa said cars were listed for free and only a success fee – based on the sale price – was charged.

He said a private seller only had to take mobile phone pictures of the car they wanted to sell and then upload it to the AutoFlip site.

The AI technology scans the images and detects and highlights vehicle body imperfections and alerts viewers to any damage.

By using this technology, AutoFlip doesn’t need to employ vehicle inspectors. 

Dealers then bid on the car within a prescribed time period. The highest bidder then wins the car and the sale is complete.

AutoFlip also doesn’t need to have a conventional logistics system because the vehicle that is sold goes directly to the buyer, without going through a system of being inspected, cleaned, stored, photographed and then placed online before awaiting sale, again being stored and then transported to a buyer.

“ My calculation is that the disposal process is 60 per cent less by using AutoFlip,” he said.

“There are also large cost savings in other areas including marketing.”

By Neil Dowling

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