UTEcon develops “Used Car Market Price Index” with AUCNET INC.

The University of Tokyo Economic Consulting Inc. (Head office: Bunkyo-ku, Tokyo; CEO: Yosuke Kawaharata; hereinafter referred to as UTEcon) a provider of consulting services based on academic knowledge in economics, accounting, and business administration, announces the development of the “Used Car Market Price Index” with AUCNET INC.(Head office: Minato-ku, Tokyo; President and CEO: Shinichiro Fujisaki; hereafter “Aucnet”). This is the first initiative in Japan to visualize an index of used car market prices.

Development Background

UTEcon has provided various support to Aucnet, including the development of a new auction system, utilizing its academic knowledge in economics and other fields.

As the economic perspective expands into the circular economy, we would like to help the industry and society as a whole understand the economic trends by visualizing price trends and demand, especially in BtoB distribution, as an index, utilizing Aucnet’s wealth of accumulated data in the reuse market,” said Aucnet. This is in response to Aucnet’s desire to “visualize price trends and demand in BtoB distribution in particular as an index to help understand economic trends in the industry and society at large. Aucnet has developed the Used Vehicle Market Price Index in response to this request.

In Japan, the “average transaction price” is often cited as an indicator for understanding price movements in the used car market. However, the “average transaction price” alone does not reflect changes in the quality of used cars traded and does not provide an accurate picture of price fluctuations. Therefore, based on Aucnet’s member distribution data, which exceeds 4.4 million items, and utilizing UTEcon’s know-how on price index construction, we have developed a “used car market price index” system that can objectively determine how much used car prices actually rise and fall in the Japanese market by incorporating various used car attributes into a statistical model. The system has been developed and presented at the “Aucnet Circulation Distribution Lab” (https://www.aucnet.co.jp/aucnet-reseach/), an in-house laboratory established by Aucnet. The “Used Car Market Price Index” will be updated and published on a regular basis from now on.

Used car market price index, a new index that visualizes price trends in accordance with the complex used car market

Since 2008, there has been a noticeable decline in the quality of used cars, as the mileage and age of traded used cars have increased. The “used car market price index,” which is statistically aligned with quality, remained at around 1.1 to 1.4 from 2013 to around 2020, but after 2020, it soared, reaching 2.2 in September 2022.The average transaction price, on the other hand, increased by only 1.4 times at most, indicating a large difference between the index and the statistically-aligned used car quality index.

By comparing changes in the “used car market price index” in this way, it is possible to accurately grasp “price fluctuations” that cannot be seen by simply looking at the “average transaction price.

“Used car market price index” by body type is also presented.

The “Used Car Market Price Index” will publish the following

①“Used Vehicle Market Price Index,” a composite of all body types
②“Used Car Market Price Index” by body type

Yuji Arimura, Chairman of Aucnet Circulation Distribution Lab, said, “Aucnet started real-time used car auctions in 1985 and has expanded into a wide variety of areas, including used digital equipment, used motorcycles, and brand-name products, while promoting specialized know-how in secondary distribution centered on reuse and the creation of distribution networks. Aucnet has been promoting the development of specialized know-how and distribution networks for secondary distribution centered on reuse. By combining Aucnet’s extensive data with UTEcon’s econometric know-how, we are now able to provide a system that accurately represents price trends in the B2B market. We will continue to contribute to society through joint research with UTEcon on the Reuse Distribution Price Index, which represents price trends in the B2B reuse market for a variety of commercial products.”

UTEcon will continue to provide consulting services that are tailored to the challenges of our clients, utilizing economics and other academic expertise.

For inquiries regarding this release, please contact

AUCNET INC. General Planning Office  request@ns.aucnet.co.jp

UTEcon Public Relations  info@utecon.net