In recent years, there has been a huge increase in demand for Japanese Domestic Market (JDM) vehicles. The surge in demand for these Japanese cars has led to skyrocketing values, but why is there so much demand for these vehicles from the land of the rising sun?
One of the big contributing factors to the increased demand and cost of JDM cars is that many of them offer excellent performance and tunability. Popular JDM cars such as the Nissan Skyline GT-R, the Mazda RX-7, the Honda Integra, and the Supra made a name for themselves on both the track and the street.
Additionally, as JDM cars age and become rarer, the demand for well-preserved examples rises. As collectors clamor for the best examples, the scarcity of these vehicles on the market pushes up their values higher, further cementing their status as sought-after investments in the automotive world.
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The Rise in Popularity of JDM Cars – The Causes
Influence of Car Culture and Entertainment
One of the driving forces behind the rising popularity of JDM cars is their impact on car culture and the entertainment industry. Many iconic movies and television series, such as Fast and Furious and Initial D, have featured JDM vehicles, generating excitement and interest among fans of all ages. Additionally, video games like Gran Turismo, Forza Motorsport, and Need for Speed have allowed players to experience the thrill of driving these cars in a virtual world. Many of the people who grew up with these sorts of games, movies and television series are now at the age where they can afford to buy the cars they lusted over (me included), so demand has gone up.
Furthermore, the growing appreciation of JDM car culture has spawned car meets and events dedicated to showcasing these vehicles. These gatherings foster a strong sense of community among enthusiasts, who share a passion for the unique characteristics and performance capabilities of JDM cars.
Performance and Uniqueness
Another factor contributing to the increased value of JDM cars is their reputation for performance and uniqueness. These vehicles often came equipped with advanced engine technology for the time (VTEC for example) and other performance enhancing features which resulted in exceptional speed and handling compared to much of the competition. Some popular JDM models, such as the Nissan Skyline GT-R and Toyota Supra, are known for their impressive power and potential for tuning and modification.
The limited availability of certain JDM models also adds to their allure, making them increasingly sought-after commodities. Since these vehicles were originally manufactured for the Japanese market, they were often produced in smaller quantities and featured exclusive features and specifications not found in their international counterparts.
As a result of the improved performance, features and specifications, enthusiasts are willing to pay a premium for JDM cars which has led to stratospheric price increases for some models (Toyota Supra MkIV for example).
Supply and Demand Factors
Limited Production and Rarity
The increasing prices of JDM cars can also be attributed to the limited production and rarity of certain models. Japanese manufacturers often produced a limited number of units, such as special editions or limited-run models, contributing to their exclusivity and collectors’ appeal. As time goes on, less and less of these already rare cars are available, and as a result, demand has grown exponentially, driving up prices for those who want to own a particular JDM model.
Importation Costs and Regulations
Another factor contributing to the rising prices of JDM cars is the importation costs and regulations. Importing a vehicle from Japan or other countries comes with its own set of challenges, including customs duty fees, taxes, shipping costs, and registration fees. Additionally, regulations surrounding car imports can be strict, further limiting the availability of certain JDM models in some countries. For example, in the United States you can’t legally import a car for road use unless it is 25 years old or older, which has limited availability of many nineties JDM favourites until very recently.
The importing process also requires thorough inspections and certifications, ensuring that the vehicle meets local safety, emissions, and other standards. These inspections can add additional costs to the overall purchase. Furthermore, finding a reliable importer to handle the process and track down the desired vehicle can be time-consuming and costly, further driving up the price of JDM cars.
Collector Market Impact
The recent surge in JDM car prices can also be attributed to a few factors relating to the collector market.
Nostalgia and Investment Value
Nostalgia plays a significant role in the growing interest in JDM cars. As we mentioned earlier, many car enthusiasts who grew up with these JDM legends are now in their 30s and 40s. They have fond memories of these cars and now have the cash to own one for real.
Another reason why values have appreciated so much is that JDM cars (and classic cars in general) have become more popular with investors. As more people have entered the collector market, values have increased.
Auctions and High-Profile Sales
Auction houses/sites and high-profile sales also contribute to the rising cost of JDM cars. These events and auctions attract significant media attention and traffic, showcasing the rare and exclusive nature of some of these JDM cars. The rise of sites such as bringatrailer.com have also led to an increase in sale prices, especially for cars in top condition.
This increased visibility has elevated the status of JDM vehicles within the collector market, with even non-enthusiasts taking notice. As a result, the demand for these cars has increased, leading to higher prices.
Global Economic Factors
In recent years, JDM cars have become more expensive due to a variety of global economic factors. Some of the most significant contributors are currency fluctuations, inflation, and rising material costs. These factors, individually and collectively, have had a notable impact on the price of JDM cars.
Currency Fluctuations
One essential economic factor that affects the cost of JDM cars is fluctuations in currency exchange rates. As the value of international currencies such as the US dollar, Euro, or Yen change over time, so does the price of JDM cars in global markets. When the Japanese Yen is strong, it increases the prices of JDM cars for foreign buyers, particularly when importing them to their countries. In addition, fluctuations in other currencies can also affect the demand and supply of JDM cars, further influencing their pricing.
Inflation
Another crucial factor is inflation. Across the world, increasing inflation rates are leading to higher costs for goods and services, including JDM cars. Inflation can erode purchasing power, which, in turn, can result in higher prices for JDM cars, as manufacturers and sellers adjust their prices to maintain profitability. This increase in cost is inevitably passed on to consumers and buyers, making JDM cars more expensive.
However, this has been somewhat negated by the increase in interest rates over the last year or so, which has made borrowing more expensive and led to a slowing economy in many countries. The slowing of the economy has led to a slight price reduction in many JDM and classic cars over the past year or so, but nothing compared to the huge price increase over the last 10 years or so.
Conclusion
In recent years, JDM cars have seen a significant ballooning in price and demand. This can be attributed to several factors, from their rarity, features, nostalgia, investment value, and much more. Prices have risen to the point where you need to splash some series cash to get many JDM legends, and cars such as the fourth generation Toyota Supra now go for hundreds of thousands of dollars for a good one.
If you would like to know more about some of these JDM legends, we have a number of extensive buyers guides that cover the history, facts and common problems on many of them. You can find all of our buyers guides here.
