A new company called Wecars was formed Wednesday to take over operations at Bigmotor, a scandal-tainted Japanese used car dealer, trading house Itochu, one of the new firm’s shareholders, said.
Itochu, subsidiary Itochu Enex and investment fund J-Will Partners invested ¥40 billion together in the new company.
Wecars is “putting customers first by attaching the greatest importance to a solid governance system and compliance, aiming to rebuild the business and achieve its growth in the future,” Itochu said in a statement.
“We’ll be able to gain the trust of customers by putting them first while growing as a business at the same time,” Wecars President and CEO Shinjiro Tanaka, a former Itochu executive, said at a news conference in Tokyo.
Wecars took over around 250 outlets and some 4,200 employees from Bigmotor. The new company’s board of directors does not include former members of Bigmotor’s board.
The Itochu side will send around 50 employees to support Wecars’ growth. Itochu also aims to cooperate with Wecars in areas including tire sales and auto insurance business.
Bigmotor had struggled with penalties, including the revocation of its outlets’ designations as private auto inspection centers, following a string of fraudulent business practices such as false auto insurance claims.
Itochu said in the statement that it “believes that the establishment of Wecars will increase the transparency of the used car business and will restore trust in the industry.”