Itochu to Support Bigmotor’s Biz Reconstruction

Yomiuri Shimbun file photo / Reuters
Bigmotor logo, left, Logo of Itochu Corp

TOKYO, Feb. 21 (Jiji Press) — Major Japanese trading house Itochu Corp. has decided to support the rebuilding of troubled Japanese used car dealer Bigmotor Co., informed sources said Wednesday.

Itochu plans to acquire Bigmotor’s prime assets, such as its outlets and vehicle maintenance factories, jointly with others including an investment fund. Bigmotor’s founding family is seen staying away from its management.

In November last year, Itochu, subsidiary Itochu Enex Co. and investment fund J-Will Partners said that they would jointly conduct an exclusive evaluation of Bigmotor’s assets.

Through the evaluation, they are believed to have concluded that the rebuilding of Bigmotor would be feasible if the company separates its nonperforming assets and reforms its corporate structure.

The Itochu group engages in a wide range of automobile-related businesses, including tire sales and automobile insurance. It apparently hopes to create synergy effects by placing Bigmotor under its wing.

Bigmotor is facing a management crisis after a series of wrongdoings at the company were exposed, including inflating auto insurance claims by deliberately damaging customer vehicles.

The company has been slapped with administrative penalties, including the suspension of vehicle maintenance operations and the revocation of the designation of some outlets as private automobile inspection centers. It also lost its registration as a nonlife insurance agency.