Arc International Has Filed For Bankruptcy

[mxfly]

A sad day for another iconic Japanese company.

http://blog.nengun.com/news-arc-international-bankrupt

[elrodeo666]

I think people would be surprised to actually know how many companies in Japan are almost on the verge of the same.

A hell of a lot !!

Some very big name companies and tuning shops are basically balancing on a knife edge into bankruptcy.

One thing to keep in mind is in Japan bankruptcy is different from Australia and most western countries.

They will file for bankruptcy and usually will get a bail out from the Japanese government.

They are given a certain amount of money and time to get it all back on track.

But if they cant keep the company going they cant apply again and thus the company will fold.

There's a couple of big Japanese part companies in this boat at present.

This isnt just isolated to the part industtry and tuning shops , its right across the board throughout Japans industries.

JAL is another, only just keeping their nose afloat and are not that far off going under as are many many more companies through out Japan.

The big problem is for the Japanese companies is their inability to change their business practices.

Its all about Wa , status and losing face and absolutely nothing to do with common sense business practices !!

Unless you live in Japan and do business there you'll never understand it.

Whats commonsense to us is a mid puzzle of many layers that they can never get their heads around.

Biggest problem now is it is happening so much now in Japan the government cant keep bailing companies out and its only a matter of time when they will have to say no to helping bailing companies out of debt.

The economy is so screwed at the moment and it sure as hell aint going to get better.

The days of the average Yamada and Tanaka san going and spending big on their cars, clothes etc are long gone.

They just dont have the money anymore.

They still want their cars to look good but no big yen going into engine builds anymore.

Its just simple mods nowdays. and thats killing the tuning parts companies and tuners.

[Chris Rogers]

mark,

you have hit it bang on. I do business in japan on a daily basis and I'm finding that everyone is VERY close to calling it a day.

if the gov't would let the yen slide a bit then they may pull out of it a bit.

thing being (correct me here) this has been going on for at least 20 years..

[elrodeo666]

Yeah Chris its pretty lean in Japan nowdays..

Consumers have really had to pull their heads in and gone are the free spending days. No disposable incomes anymore.

You have people on massive wages cuts, some working for next to nothing or nothing at all just to keep their jobs.

Japan has slipped to number 3 in the world economies with China surpassing them late last year and theres only one way Japan is heading and aint up.

Problem is the govt cant do anything about the price of the yen.

They tried to control it a bit last year but it was a stop gap measure which only lasted about 1 week or so..

The yen is always a good thing to buy when world economies are unstable and and this screws the Japanese government in that they have no control of the yen.

Right now they have 0-0.1% interest rate. They are massively in debt to tune tune of billions of yen. Housing/Real Estate problems are at a record all time low again ( over the last 17years each year has broken records)

The only thing and the smart thing to do is increase interest rate , increase their goods and service tax but this will crucify a massive amount of people and put them on the streets and with the piss poor social welfare their will be huge homeless problems, defaults on mortgages plus huge social problems not to mention potential mass suicides. Japanese are not good at handling problems.

Problem is no government leader has the balls to do this so its just a merry go round of new Prime Ministers and bullshit promises.

They are just chasing their tails and slowly sinking further and further.

I wouldnt be surprised to see a few more companies going down the tube this year.

Japans Fiscal year started beginning of January and I think companies are finding themselves further and further in debt and balancing on a knife edge into permanent closure.

Theres a couple of big companies now who dont even keep stock anymore and keep everything on back orders and are only produce product when they get enough orders to do a run.

The thing is its half the companies fault as they are so locked into the Japanese way of business they cant see that selling goods at lower prices is better option when things are tough.

Better to have some sales rather than bugger all.

Try to convince them of that and you'll split your head open from banging it on a brick wall.

F@#k even the Yakuza are struggling with some actually having to get some sort of social hand outs.

By the way Zero Sports has filed for bankruptcy as well.

[Chris Rogers]

I know that nissan are doing the same thing for parts. I have issues at times ordering electronic assemblies and sometimes panel work. they simply say they are stopping production until the production target is reached.

two aftermarket companies I deal with do the same thing. I will request stock, wait two weeks for an invoice and wait a further 2 weeks for stock to arrive. when talking to them the are making the order when I order it.

for someone at my level (small business) it is fine to hold minimal stock but I can't really see the logic in the process they are using.

that could well explain why most are sourcing from china now. whilst japan is sliding down the ladder financially and labour costs are high china is winning due to low labour and the get it out there attitude.

already been through a fisical japan year. I get reminded of sales targets to which my reply is: oz is 22milion people. so the entire population will just about fit in the city of tokyo. something that most jap suppliers seem to miss.. ( big country - small population)

FWIW Oz ain't doing that much better. there are days that I'm twiddling my thumbs because the markets are right off pace and then days that everyone loads up the credit cards again. there is not a even spread of market like there was 3-4 years back. same issue as japan - the overspenders aren't doing it anymore as the money is not there.

the RAWs situation is the same. they are struggling for a market s well. its a global issue overall I think.

my 2c

[paulR32gtr]

Interesting read guys. Sad to see it happening.

I guess China will eventually (and to some degree already has) shed the poor quality image as they move to fill the gap left by the Japanese.

I don't however think China will ever be able to match those philosophies of uncompromising quality Japan gained after WWII.

[Nee-san]

You will find as china starts to bring its living standards and wages into line with the rest of the world (inevitable) they will be unable to sustain the current level of growth and competitiveness.

It will reach plateau eventually.

[Chris Rogers]

You will find as china starts to bring its living standards and wages into line with the rest of the world (inevitable) they will be unable to sustain the current level of growth and competitiveness.

It will reach plateau eventually.

true. the reason everyone can make money from china is the living standards are low and wages are too. give it 10-15 yrs to catch up. thailand is the next one to watch. ford/isuzu/mazda already make trucks there and I figure that it will take on other things as well.

[elrodeo666]

The thing is from living in Asia and dealing with all the different countries the Japanese are just to complacent and even though the problem is right in front of their eyes they just wont believe and dont want to believe that their country is slowly sinking as a power house.

They are slowly depleting their fish stocks, farming is going down the tubes as young people are leaving the country and flocking to the city.

Japans changing, young people dont want to be robots like their parents and grandparents and work themselves to death. They are becoming lazy and lots of people now are happy just to work part-time.

Lots are leaving Japan and heading to China to work as theres plenty of work for them and better quality of financial life.

Honestly I think its the opposite with China.

They are so hungry for money , development and status and I think as more and more people there are making money they will demand quality.

The Japanese just cant compete with them as China is just exploding and has only just started.

I've got a few friends who are involved with real estate in Japan, mainly in the ski areas and big business companies from China and Hong Kong are buying up big time in Japan and going for massive development.

The difference between Japan and China is Japan has now 2 distinct classes..the poor or low income earners and the wealthy.

China on the other hand has distinct 3. The poor / lower class , middle class and the wealthy and the thing with China is they are really into bolstering the middle class.

China will definitely plateau out but its got a long way to go before then.

I think you'll see China , Korea , Thailand and Singapore as thig monsters in Asia in the future and japan the little guy hoping for a few crumbs.

And Chris as for Nissan...ha they are a joke..

Never have stock, well almost never. You have to wait for ages or like you said when and if they decide to do a production run.

They are quite rude even to big workshops in Japan and they index their prices every 6 months with a 5% increase (10% annually) in other words they are a pack of arseholes.

[elrodeo666]

Just to add to the mess..

I just got word that Superior Auto Creative are in the poo as well

http://www.superior-cia.com/

[Psymon]

thailand is the next one to watch. ford/isuzu/mazda already make trucks there and I figure that it will take on other things as well.

Don't forget Nissan and Mitsubishi.

[elrodeo666]

Just a bit more of heads up on the ARC debacle..

I was talking to a friend of mine who runs one of the largest Japanese wholesale parts companies in Japan and he was saying that the problem for ARC stemmed from the fact that customers were basically going elsewhere for parts.

Japanese customers basically had lack of funds and were mainly turning to companies like HPI for their goods as they were cheaper and much more competitive than ARC.

ARC didnt want to discount their products so have gone belly up.

Typical Japanese companies stubborn way of thinking.

Theres a possibility of seeing ARC back as a restructured company but not looking good at present.

[Chris Rogers]

sounds familiar. one of the companies I deal with is doing that. the other will deal at will.

[Riggsy]

So if i understand this correctly. Does this mean that so many companies are competing with each other resulting in most going out of business. If so does this affect people who buy imported cars and imported parts? Do we have to pay more or do we just have to look for the company that is cheapest?

Just curious

ps Chris your R32 build made me want to get a R32 thank you

[elrodeo666]

So if i understand this correctly. Does this mean that so many companies are competing with each other resulting in most going out of business. If so does this affect people who buy imported cars and imported parts? Do we have to pay more or do we just have to look for the company that is cheapest?

Just curious

ps Chris your R32 build made me want to get a R32 thank you

No it wont affect people who have imported cars and parts.

Its just the big companies have had the monopoly of the market for quite some time and now Japans economy is stuffed people there dont have the money to spend like they used to.

So along comes other companies who have a bit of brains and are selling parts a lot cheaper and take a big chunk of the market.

There will still plenty of parts and hopefully some of the Japanese companies learn from this and change their ways before its too late.

Honestly I think this just the tip of the iceberg with a few more companies to follow suit.

I was told last week that Superior Auto Creative lodged for bankruptcy the same day as ARC and Zero Sports.

Word is that Zero Sports might be bought out by another company but still waiting for confirmation on that.

[Riggsy]

All very crazy stuff. Well lets just hope that everything works out for everyone and we all live happily ever after ....with skylines

[mxfly]

I was told Kakimoto has or is about to bite the dust as well.

[elrodeo666]

I was told Kakimoto has or is about to bite the dust as well.

Theres a lot of rumors going around but yeah there is a quite a few companies right on the brink of serious financial trouble.

[zebra]

It does suck that these companies are going belly up.

But the prices they are asking (im not just talking about ARC here either) are just stupid...DO these companies not know that there are now heaps of import parts being produced by American and Australian Companies that offer the same level of quality but at 1/3 the price.

Asking 2000 dollars for a 15 year old design intercooler kit is a bit silly. The prices should drop as time goes by and after they have paid off their R&D costs, as per the American market.

Think the LS1 V8 for example, 12-14 years ago stroker kits were US$15k+ now the very same kit is US$6k or less, and the company has developed cheaper kits as the market became available for them to do so.

The Japanese tuning companies have not, and IMO we the buyer have had enough of paying through the nose for a HKS/GReddy/ARC/Tomei stamp on the side, especially when the product dates back to the mid 90's, and we have local product here we can buy for much less.

Another E.G is JUN con rods, they are Produced by Arrow in the UK, and cost around AUD$2K for a set of 6, now you can buy the exact same product minus the JUN packaging for around AUD$1200 from Arrow.

Maybe the Japanese car owners do not research their stuff and simply point at a workshop car and say "I want the exact same as that" or they believe the parts list has to have all the big names on the side. I'm not sure, I did see above that they were moving towards the Cheaper Chinese Sourced parts like HPI etc.

Anyway I may be way off, but there is my tree fiddy

[elrodeo666]

Another one bites the dust ..!!!!

C-ONE has filed for bankruptcy around same time as ARC,Zero Sports & Superior Auto Creative.