DRIVE TIME AREA AUTO DEALER ENTERS CONSIGNMENT BUSINESS.

Byline: MUHAMMED EL-HASAN

Staff Writer

A Japanese seller of used cars has chosen Torrance to try an old idea for the first time.

Tokyo-based Gulliver International, which auctions vehicles and sells them at retail throughout Japan, recently began to market cars on consignment in Torrance.

Torrance-based Gulliver USA Inc., the company's U.S. arm, will open its dealership today with a handful of cars on the lot as a start.

"This is the only place we're going to promote consignment," spokesman Scott Brause said. "This is bringing something new into play."

Consignment involves a person handing over to an agent goods to be sold on his or her behalf.

The 3-acre Torrance dealership called Gulliver Car Connection Center, at 20433 Hawthorne Blvd., previously housed Dodge World.

When full, the lot will hold about 300 vehicles.

"We want to keep it about 250 consignment and 50 as inventory," said Chris Hung, Gulliver USA's new business development manager. "Right now, we're getting consignment from other dealerships. We're promoting it as a second lot for them."

But the company's goal is to draw consignment vehicles mostly from individual car owners who seek help in selling their vehicles.

Those private consignments have begun to trickle in as people become aware of the opportunity. The grand opening is Saturday.

Gulliver's Torrance dealership is part of the company's U.S expansion.

The new site is much larger than its previous Torrance location, which was simply a warehouse with no retail component. That warehouse was used to hold cars until they were sent to auction or sold wholesale.

In addition, Gulliver recently signed a lease in Yonkers, N.Y., where the firm will open a new dealership.

In 2006, Gulliver opened its first U.S. retail location in Santa Clara.

Gulliver USA first opened an office in Torrance in 2004, and started operating its warehouse the following year.

In the South Bay, Gulliver has been known for its service of going to a prospective car seller's home or work to examine the vehicle and possibly make an offer on the spot.

Gulliver will continue that part of the business, which involves reselling the cars in auction or through wholesale.

Gulliver usually buys cars that are no older than 10 years for domestic vehicles and 15 years for foreign brands, Hung said.

The company's Torrance business has been selling about 80 cars a month, with 5 percent to 10 percent of them exported mostly to South Korea and Japan, Brause said.

Many used-car dealerships will sell on consignment "if you ask them," said Daniel Salzedo, general manager of Costa Mesa-based Orange County Professional Auto Brokers Inc.

"At the moment, (vehicle consignment) is not that common, but a lot of people are starting to pick up on this," said Salzedo, whose firm sells used cars, with about 10 percent of sales from consignments. "We have started specializing more and more in consignment. It's a service like anything else."

Consignment's main benefits for people wanting to sell a car is that dealerships have broader and more effective marketing and convenient services for buyers such as financing and trade-in offers, said Salzedo, whose firm opened in 1994.

Recently at Gulliver's new Torrance location, workers were installing wiring in the lobby, painting a display area floor and putting up a large sign.

Many of the administrative workers spoke Japanese to each other. Even Brause speaks Japanese.

According to Gulliver's policy, a consigner who brings in a car may receive an up-front offer from the dealership to buy it directly.

"First and foremost, we'll try to buy their car, and if they don't accept the offer, then we'll offer consignment," Hung said.

If the car owner chooses consignment, the vehicle can be displayed on the lot free for two weeks. And the consigner can determine the car's price tag, Hung said.

If two weeks pass without a sale, Gulliver will charge the consigner $150 a week until the vehicle is sold.

For an extra $150, a consigner can have his vehicle placed in a more prominent display area.

If a sale occurs, Gulliver pays the owner the sale price minus a $499 fee.

Gulliver eventually will offer financing to buyers, Hung said.

While consigners will be allowed to keep their cars on the lot as long as they pay the weekly fee, Gulliver's own displayed inventory will see frequent turnover, Brause said.

"We try to move our inventory out as soon as possible," Brause said. "If we can't sell within three weeks, we'll auction them. That reduces our risk, and it reduces our overhead. ... People don't want to buy something that's been sitting in the back of a dealer's lot for six months."

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2 photos

Photo:

(1 -- color) Japan-based car seller Gulliver is opening a consignment car lot on Hawthorne Boulevard in Torrance. Workers were installing signage this week at Gulliver Car Connection Center.

(2 -- color) Chris Hung is the new business development manager for the Torrance location of consignment car seller Gulliver.

Robert Casillas/Staff Photographer