From Issue Six of Gear Patrol Magazine.
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In 1989, Gary Duncan had a seemingly life-altering experience. Duncan, who had been a dealer of foreign cars since the age of 19, scored a trip to Japan to visit that year’s Tokyo Motor Show. It was there he first laid his eyes on the Nissan Figaro concept car: an aggressively retro convertible just over 12 feet long, five feet wide and powered by a one-liter engine putting out barely more than 50 horsepower. “I thought, ‘Man those are cool… I gotta have one,'” says Duncan. “I didn’t know at the time that it would take twenty-five years.”
Today Duncan, now 65 years old, has his Figaro. In fact, as of writing, he has 150 of them, along with hundreds of other Japanese cars and trucks from the ’80s and ’90s, parked in his warehouse in Christiansburg, Virginia. By Duncan’s estimate, he has the largest collection of Japanese-market cars in North America. Most of them are for sale.
His diverse collection of over 600 Japanese vehicles comprises sports cars, kei cars, vans, trucks, luxury cars and even hearses. It is a staggering representation of an auto-industry era that was marked by innovation, creativity and excess, and which was long withheld from a generation of American automotive enthusiasts who were unable to legally experience it in person, having to settle for vicarious exposure through video games and movies. Over two decades later, thanks to people like Duncan — and an allowance in a 1988 piece of legislation called the Import Motor Vehicle Safety Compliance Act — these cars are finally getting their due.
Toward the end of 1985, after decades of steady economic growth, Japan began to experience an economic bubble driven by a stronger yen, low interest rates and aggressive speculation, resulting in a massive inflation of stock prices and real estate. This prosperous time emboldened Japanese automakers to think bigger, invest heavily in their R&D and chase a growing segment of increasingly wealthy consumers. No niche was too obscure to fill, and no technology was too outlandish to pursue. Compact cars with gull-wing doors. Four-wheel steering. Gyroscopic navigation systems. Triple-rotary engines. Competition between the Japanese automakers only fanned these flames of innovation.
As such, the Japanese automotive industry experienced a golden age. Until this point, most Japanese cars were well-built albeit staid mass-market cars, but now every automaker had a performance car, luxurious land yacht or quirky economy car. Some of these cars — like the Honda NSX (known in the US as an Acura) and Mitsubishi 3000GT — were sold stateside, but many remained exclusive to the Land of the Rising Sun. Although Japan’s bubble economy had burst by 1992, its halo cars would continue to be produced and sold deep into the decade.
Around the same time that Japan’s economic bubble was inflating, the US automotive market was experiencing its own shift. As domestic manufacturers struggled to compete with imports, demand for European cars from brands like Mercedes-Benz and BMW was growing. Because the US has its own standards for emissions and safety, these offerings from European automakers had to be engineered specifically for the United States domestic market (USDM). This meant some models and trims — many of which were deemed more desirable by enthusiasts — weren’t sold here because manufacturers thought the profits wouldn’t justify the added expenses.
This, in addition to a then-strong US dollar, led thousands of foreign-car buyers to the “gray market.” Gray-market cars were bought in Europe, shipped to the US and then brought into compliance with US standards in shops. This way, a car buyer in the US could have a Euro-market trim — often at a substantial savings — even after spending thousands to import the car from overseas and modifying it to comply with US regulations.
Unsurprisingly, automakers didn’t like losing US sales to this workaround, and in the late ’80s, Mercedes-Benz led a lobbying effort to stifle the importing of gray-market cars. In 1988, the Motor Vehicle Safety Compliance Act was passed, making it virtually impossible for importers to bring non-USDM cars into compliance. Today, importers need to perform expensive crash testing to prove non-USDM cars are safe enough to enter the United States, or obtain an official letter from a manufacturer saying they’re “substantially similar” to those officially sold in the US.
But there was one small concession made to car enthusiasts within the Imported Motor Vehicle Safety Compliance Act: any car can enter the US, fully exempt from federal safety and emissions standards, so long as it’s 25 years old (according to the date of manufacture, not the model year). For those patient enough to wait two and a half decades, the 25-year rule was the only beacon of hope to owning automotive forbidden fruit.
The stars have begun to align for US car enthusiasts now that the 25-year window lines up with Japan’s golden era of cars. Japanese domestic market-only (JDM) imports appear to be a fast-growing part of car-collecting culture in the US. According to the United States Department of Commerce, in 2013, approximately $9.36 million worth of used cars made their way to the US from Japan. In 2017 that figure surged to a whopping $72.6 million.
“We started out with fairly low volume, [selling] about four or five cars a month,” says Chris Bishop, who started his importing business, Japanese Classics LLC, in 2011. “But I’d say about twenty-five to thirty is the average right now. Part of it was availability — there weren’t a lot of exciting cars that had a ton of demand when we started.”
According to Bishop, the number of importers hoping to capitalize on the nostalgia for these cars has also hugely increased. “When we first started, I think there were probably four other companies, max, that had similar businesses importing cars from Japan, specifically sports cars,” he says. “There are probably a hundred of them now.”
But for Bishop, Duncan and other importers, perhaps the hardest part of the whole thing is the very first step. “People say, ‘Oh, I’m gonna fly to Japan and find a car and buy it.’ But it’s really not that easy,” says Bishop. “Driving around, you generally don’t see old cars…it’s pretty few and far between where you see something interesting. We import over three hundred cars a year, so we have to pull from every source available — private sellers, dealers, wholesalers, auctions — to do that kind of volume.”
It’s a pain echoed by Duncan: “When I came to Japan, I had this preconceived notion that I knew more about finding cars than the Japanese did and that we needed to be knocking on doors and seeing dealers,” he says. “But I quickly learned over there that the cars usually get sold to the dealer then end up at auction.”
Used-car auctions are massive in Japan, generally featuring thousands of cars on a daily basis. But not just anyone can actually bid on them. To keep transactions orderly, only dealers and exporters can register to bid, so would-be car importers must hire someone to buy a car on their behalf. Duncan and Bishop both say it’s wise to inspect the car in person, or have a trusted proxy do it. For these reasons, both Duncan and Bishop have employees or brokers on the ground in Japan to scout, inspect and buy vehicles.
Once an importer has secured a car, a web of red tape and logistical challenges lie ahead. It’s almost by design an intimidating process, but it’s far from insurmountable. “Retrospectively, it seemed daunting at first, but it was a bit easier than I had thought it would be,” says Bishop, recounting the first time he imported a car from Japan.
Shipping needs to be arranged to get the car to port where it will wait to embark. During this time, shipping insurance should be arranged, and the car needs to be steam cleaned before it’s shipped (the US Department of Agriculture requires all foreign soil be removed from the undercarriage). Similarly, any personal items or junk needs to be removed. “Your car is not a shipping container,” the US Customs website bluntly states.
Shipping is done in either a container or “ro-ro” (roll on, roll off) where it’s driven onto the ship deck, strapped down and exposed to the elements. Container shipping is usually more expensive than ro-ro; while it does keep your car protected from storms during the multi-week trek across the ocean, Duncan notes that out of the hundreds and hundreds of cars he’s had shipped ro-ro, only a handful have been damaged in transit.
Next comes the exciting stuff: paperwork. Even though a 25-year-old car is exempt from DOT and EPA regulations, DOT form HS-7 and EPA form 3520-1 need to be completed to clear Customs. A bill of lading, a bill of sale and a foreign registration (or in the case of Japan specifically, an export certificate) that’s translated into English are also needed to file entry. The importer of the car must be present to file entry once the car arrives at port, though it is considerably easier for the buyer to hire a customs broker to do this instead. A government-issued import bond is also required — this document ensures US Customs will receive payment of all duties and fees. Passenger vehicles require a 2.5 percent duty while light trucks are saddled with a 25 percent tariff.
But even if a car arrives at port in the US with all necessary forms filled out, there are still no guarantees that everything’s good to go. There’s a possibility a car will be randomly inspected to make sure it is, in fact, 25 years old and free of any smuggled goods. If a car is selected for random inspection, its importer is on the hook for a storage fee during that time. According to Bishop, about 20 percent of his cars get flagged for inspection.
“It doesn’t happen every time, but it happens more than people think,” says Bishop. “They’ll go through a lengthy process, including a visual inspection, just making sure the car is what it looks like… that it’s twenty-five years old, that there hasn’t been a VIN swap.”
Inspections may be random but they happen for a reason: some unscrupulous importers will attempt to smuggle in cars younger than 25 years old. Often this is done by bringing in parts piecemeal, assembling them, then claiming the built car is a “kit car.” Others will swap the VIN of an older car onto a new car being imported.
The “kit car” trick has become common among shady JDM importers, particularly with newer Skyline GT-Rs, while the VIN swapping is more common with long-running models coming from Europe, like the Austin Mini or Land Rover Defender. These illegally smuggled cars may make their way into the US, but if they’re ever found out (be it at the port or after the fact) they’ll be seized and crushed.
For that reason alone, it pays to be patient and wait until a car is 25 years old. Assuming the importer does everything by the book, the car can then be titled at the DMV. This can be a frustrating process, as most DMV workers are flummoxed by the foreign paperwork required to title an imported car — Bishop said it took him four hours to title his first import. But the car will, eventually, get a title. And it will, eventually, get to be driven in the US after two and a half decades of waiting.
To non-enthusiasts, it probably seems idiotic to endure the stress and bureaucracy of this import process, but to a generation of car enthusiasts, it’s more than worth it. Car collecting exists as a persistent cycle of nostalgia, wherein each generation buys the idolized machines of their youth, decades after the fact, when they have the means to afford them. For Boomers, it’s classic Americana and muscle cars. For Gen Xers, it’s the high-strung European performance cars of the ’80s. For millennials, it’s the forbidden fruit from Japan’s glorious golden era.
“Tons of guys come in here saying ‘I remember playing Gran Turismo and I had this car and I always wanted it,'” says Bishop. “A lot of people have connections with these cars that I would compare to guys with muscle cars. People that are twenty to thirty-five have that same connection with Japanese cars, but the cars were never here… you have this nostalgic connection to this thing you’ve never actually seen before.”
Of course, you don’t need to be in your 20s or 30s to love these cars. Duncan, after all, is in his 60s, and he was just as capable of forging a personal connection with the Figaro he saw at the Tokyo Motor Show all those years ago. Maybe, then, it’s about the enduring charm of these outside-the-box machines. Or maybe it’s about the unrelenting desire to have something you’ve been unfairly denied for so long.
“It is really satisfying [to finally have one],” says Duncan. “Think of it this way: You and I can go to a Cars and Coffee and ride in with any of these right-hand drive cars from Japan. A guy sitting across the parking lot has a fifty- or hundred-thousand-dollar Porsche. And you’re sitting over here with your ten-thousand-dollar Figaro. Who do you think is gonna get the most attention?”
That vindication is why these cars are worth the rigmarole. After 25 years of waiting in anticipation, the headache of paperwork, steam cleaning, shipping logistics and a 2.5 percent duty may seem like the final slap in the face to enthusiasts who have wanted these cars for so long. But in the grand scheme of things it’s entirely worth it when you come to find that the car is every bit as great as you hoped it would be.