Recognized as one of the Internet’s leading automotive sales and service companies, Autobytel.com (Nasdaq: ABTL) announced Thursday that it is taking its high-flying e-commerce act to car-crazed Japan.
The Irvine, California-based company signed a joint-venture agreement with six Japanese companies to begin selling pre-owned vehicles and financing and insurance by early next year.
The six partners represent a range of industries, from e-commerce to financing and general business development, Autobytel.com said. ITOCHU Corp., Trans Cosmos, Inc., Recruit Co. Ltd., Orient Corp. and e-solutions inc. will take a 66 percent share in the venture, with Autobytel taking the remaining 33 percent stake. The initial capitalization is expected to be $12.2 million (US$).
“The rapid growth of e-commerce in Japan, in conjunction with its position as the second-largest automotive market in the world, makes it an ideal market for Autobytel.com’s global expansion,” said company CEO, Mark Lorimer.
Lorimer recognized the distinctions between the United States and Japan, saying that its new Japanese partners were chosen because of their experience with Japanese automotive e-commerce, and their understanding and respect for the traditional automotive business in Japan.
ITOCHU Corp. is a $118 billion trading company and is familiar with e-commerce, having launched Excite Japan with Excite, while e-solutions has worked extensively in the e-commerce field and will be leading the Autobytel site development.
A Market On The Rise
Japan is widely recognized as ripe for e-commerce expansion. The Japanese Ministry of International Trade projects that e-commerce spending in the country will jump to $4.3 billion in 2000, up from $1.9 billion this year.
Like many e-commerce companies targeting Japan of late, Autobytel sees the prognosis as too good to ignore. With ventures in Canada, Denmark, Norway, Sweden, Finland and the United Kingdom, it isn’t the company’s first push to foreign shores, but it could ultimately prove to be its most significant.
Launched in 1995 in Corona del Mar, California, Autobytel offers free, one-stop shopping for new and used vehicles from a North American network of 2700 dealer franchises. The company recently announced that its purchase-requests sent to dealers are resulting in sales of $1 million an hour, or in excess of $9 billion annually.
The company has completed nearly $68 million in preferred stock financing, and it is clearly out in front, in an online industry that is expected to boom in the future. Automotive analyst JD Power & Associates say that half of all automobile purchases in the U.S. by the year 200 will be made over the Internet.