Japanese used-car firm to focus on brand awareness as it builds up JV in Thailand

The firm has formed a joint venture with local company V Group, a first for Gulliver, which chose Thailand after seeing that car ownership per household in the Kingdom is only 13.8 per cent, compared with 86.5 per cent in Japan.

"Even though Thailand has witnessed dropping prices in the used-car market, which has been affected by the first-car-buyer scheme [of the previous government], we still believe this market will provide growth for us in the long term, from the [ratio] of car ownership versus households," said Katsushi Nomura, managing director of V-Gulliver.

He said he expected the used-car market to normalise by mid-2015.

He said that even though Gulliver is well known among Japanese, Thais were not familiar with it. Therefore, it will spend time building brand awareness. It will also suggest the system used by Gulliver at home to Thai used-car dealerships to which the company is offering franchises.

Nomura said branding was important to give potential customers assurance they will get a quality vehicle.

The company targets the middle-income market, as Thais in this bracket look for quality vehicles.

Gulliver’s business model in Thailand is different from Japan’s. V-Gulliver will sell franchises to used-car providers that want to upgrade their standards, and Gulliver will help them with marketing.

"At first, we want to know what the customer needs and how we can [transfer] the system from Japan to Thailand," he said, adding that this would take time, such as for establishing a pricing-evaluation system and call centres.

In Japan, the call-centre model has been a key to Gulliver’s success, supporting sales by making appointments among buyers, sellers and a pricing team to evaluate what vehicles are worth.

In Thailand, the company has outsourced this function. Nomura noted that the call-centre system was something new in the Thai market, and some functions might not be implemented in Thailand, such as door-to-door activities, because sellers and buyers of used cars preferred looking at vehicles in tents or showrooms.

"We have to do the call centre, as this will facilitate sales in the future after we have more franchises here," he said.

The company plans to expand the number of franchises quickly over the next three years as it hopes that even though it will take a loss in the first year of operation, it hopes to make a profit in 2015 in order to have the money to improve the system.

V-Gulliver earns revenue from selling franchises and annual loyalty fees. It has three franchise outlets already and will have two more by the end of the year. It aims to have 300 outlets by 2016.

If Gulliver regards the Thai enterprise a success, it may think about further expansion in Asean markets, Nomura said.

He said Gulliver spent 20 years establishing its system fully in Japan, and hopes to do the same in Thailand in only five years.