How to Export Automobiles
Dennis Hessler
Identifying the types of cars most likely to sell in your
target country requires a little research. If you already have
an in-country contact (friend, relative, or business partner),
ask him to send you copies of the local "Auto Trader"-type car
magazine and the classified section of the Sunday newspaper.
This will tell you what U.S. cars are most in demand and what
prices buyers are paying for them.
If you have no in-country contact, you may be able to
purchase copies of big city Sunday papers of the foreign country
at large newsstands or by surfing the Internet and conducting a
search of the newspaper in the biggest city in your target
country. Some automobile exporters develop pen pal relationships
and get the information that way. The point is, find out what is
selling and how much people are paying for it.
Do I Have to Purchase the Car First?
The short answer is yes. The longer answer is, it depends.
Now that you're completely confused, let me explain.
If you are not interested in becoming involved in the
buying and selling of used automobiles, you might decide to
become a finder (there's a great book on becoming a finder at
http://www.spyglasspoint.com/finder.html) whose job is to find
particular cars for foreign citizens for a fee.
You might also want to consider checking out the Auto World
web site at (http://www.autoworld.com). It's a great way to find
a particular used car at your ideal price anywhere in the U.S.
You should expect to earn about $500 to find a particular
car for a foreign buyer. You may receive more if you handle
shipping and other arrangements.
If you're planning to buy and sell the car, your profit
will be greater but so will the risks and the time you spend on
the project. If you're planning to buy and sell cars on a full
time basis, you should seriously consider becoming a used car
wholesaler. That way, you'll have a license and can attend
auctions and go to dealers to get the very best prices.
Remember, you make your profit when you buy the car, not
when you sell it. Once you have some idea what price a buyer
will pay for a particular car you can begin your research. Yes,
the National Automobile Dealers Association (NADA) Used Car
Guide or "Blue Book" can give you some idea of the cost of the
car. But buying used automobiles isn't like buying groceries.
There is no "normal price" for a particular car. There is much
involved such as the condition of the car, its availability and
more.
Check out NADA's "average loan value" for the car. This is
the amount a bank will loan you if you use the car as
collateral. This is your target price for purchasing the
vehicle. By the way, you can find the NADA "Blue Book" at your
credit union or bank or buy it at many bookstores.
Is This Going to be Profitable?
Once you've identified the kinds of cars you want to
export and have determined that you can make a decent profit
selling it overseas, it's time to do some math. Let's say you've
discovered that 1992 Plymouth Lasers are popular in Italy. A
review of Italian car magazines show they are being sold for the
equivalent of $9,500 in Italian Lira. The NADA wholesale value
is $4,500 (I am making these figures up for purposes of this
illustration but the fractional relationships between buying and
selling prices in some foreign markets are approximately correct).
You must then determine what the shipping costs of the car
to your target country would be, add in any import, value added
taxes and other expenses then determine what your buyer (an end
user or, more likely, a dealer) will pay. Subtract these two
figures and determine if it's worth your trouble to export.
While there are specialty automobile shipping companies,
your regular freight forwarder (check in the Yellow Pages) may
be able to have the car picked up, delivered to the port and
even crated (recommended, particularly to certain third world
countries). To determine other aspects of selling a car to, in
this case, Italy, simply call 1-800-USA-TRADE and ask the
representative to give you the Commerce Department office who
can help you with the sale of a used automobile to Italy. What
you're looking for is someone who can provide details on
tariffs, other taxes, unknown restrictions or other information.
Information is the lifeblood of the exporter. He needs to
know the status of prospective markets, products and where to
turn for more information.
I produce a range of information products on various
subjects related to exporting. Of course, I think they're all
great, but if you have to pick just one, I'd suggest The
Computer User's Guide to Running Your Own Exporting Company.
Knowing how to use your computer in international trade is vital
and this package shows you how to do it. A complete listing of
all my information products and some produced by others is
available at my web site: http://www.spyglasspoint.com
You can't know too much when it comes to running your own
business. There are lots of great books on exporting. A must-
have on your shelf is the U.S. Commerce Department's current
edition of A Basic Guide to Exporting. When you order either The
Computer User's Guide or The Exporter's Master Package, you'll
receive the entire book on CD-ROM absolutely free.
If you want to learn more about getting started in
exporting including frequently asked questions, common mistakes
and a few of my favorite Internet links, go to my web site at
http://www.spyglasspoint.com/ You can also download a sample
copy of my monthly newsletter written for new international
traders, the International Trade Connection, by emailing to
newsl...@spyglasspoint.com. This article on automobile
exporting came from an issue last year.
====================================================
Dennis Hessler | http://www.spyglasspoint.com
Spyglass Point Productions | Den...@spyglasspoint.com
====================================================
Publisher of The "International Trade Connection"
newsletter and "The Computer User's Guide to Running
Your Own Exporting Company."
SAMPLE NEWSLETTER: newsl...@spyglasspoint.com
PHONE: (850) 438-5527
=====================================================