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Big Motor, once the largest chain of used car dealerships in Japan, is now on the brink of collapse. From earning billions annually to allegations of fraud, this scandal not only exposes the dark underbelly of corporate malpractice, but also sheds light on Sompo Insurance's complicity. Dive in as we unravel how nepotism and corruption paved the downfall of an empire. In this video, we trace Big Motor's rapid ascent, the damning revelations, and the subsequent shockwaves felt throughout the Japanese business landscape.
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0:00 - 3:05 Intro
3:06 - 7:54 History
7:55 Insurance Fraud
#Wallstreetmillennial #japan #bigmotor

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Foreign decades, Big Motor has been a household name in Japan as it is the single largest chain of used car dealerships and repair facilities in the country. They had 300 locations across the country, 6 000 employees, and they generated the equivalent of 4 billion dollars in annual revenue by opening up dozens of new locations. Every year, Big Motors revenues and profits kept going up. The company looked Unstoppable But in the summer of 2023, everything collapsed on.

July 25th Big Motors founder and President, Hiroyuki Kanoshiga held a press conference where he announced his resignation. The very next day, the company's vice President, Koichi Kaneshiga, who happens to be the President's son, also resigned. This came after leak videos showed Big Motor employees deliberately damaging customer Vehicles so that they could fraudulently over Bill Insurance companies. These fraudulent activities have been going on for years, allowing Big Motor to bag tens if not hundreds of millions of dollars of ill-gotten games.

Insurance fraud happens all the time. One of the biggest jobs of an insurance company is to investigate claims and make sure they're legitimate. What makes this case so shocking is that Sampo, one of the largest insurance companies in Japan, not only knew about Big Motor's fraud, but even helped to cover it up. So what's going on? Why would an insurance company allow itself to be defrauded in light of the Scandal Big Motor is hemorrhaging customers and closing stores.

They froze hiring and look to be on the brink of bankruptcy. In this video, we'll take a deep dive into the Scandal that shocked Japan and how one nepotistic hire destroyed a business. Empire Before we dive into the video, a brief word from our sponsors over at Brilliant. In an era where disruptive Innovations are transforming the global economy, enhancing your understanding of science and technology is crucial.

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Foreign Big Motor was founded in 1976 by Hiroyuki Kaneshige. The value proposition is a One-Stop shop with everything you need to buy, sell, and maintain used cars. In addition to having an inventory of used cars, each location also contains a repair shop where you can get your oil changed, replace your tires, or other minor repairs for more serious repairs. Big Motor ships the cars to larger repair centers which have access to more sophisticated equipment.

Throughout the 1980s, 90s, and 2000s, Big Motor expanded rapidly, spending tens of millions of dollars on television commercials and opening up hundreds of locations around. Japan. In addition to their core Revenue sources, Big Motor also makes money as an insurance agent. Whenever a customer buys a car, a Big Motor salesperson recommends them a car insurance policy, and Big Motor receives a commission from the insurance company.

Many of the car repairs they perform are covered by insurance, so their relationship with insurance companies was very deep indeed. Around 2015, Hiroyuki Kaneshire was getting old, so he appointed his son Koichi Kaneshige to be vice president of the company. While he was technically only the vice president, Koichi became the de facto chief executive with decision-making Authority His father's ultimate intention was to step down and have his son take over the Reigns. Standing at 160 centimeters or 5 feet 3 inches tall, Koichi was a man of small physical stature.

Many of his friends and colleagues called him by the nickname Conan in reference to a popular Japanese TV show starring a child detective. But as we'll see, Koichi made up for a small size by adopting a larger than life management style. Shortly after graduating college, his father arranged a job for him at Sonpo Insurance, which is one of Japan's largest insurance companies and happened to be a major partner of Big Motor. around that time.

37 Sampo employees also quit and took managerial jobs at Big Motor. As we will see shortly, Sample will become a key enabler of Big Motor's fraud. After working a Sampo for just one year, Koichi traveled abroad for postgraduate education. Specifically, he went to New York to earn a master's in Business Administration or MBA from University of Rochester.

Upon completing his degree in 2015, he came back to Japan to become vice President of Big Motor. From the first day, Koichi gave a bad impression. For starters, he would never stop bragging about his MBA degree. He wanted to establish a clear contrast between himself and mid-level managers, most of whom started as mechanics and lacked higher education.

Koichi believed that for the business to grow, he needed to set aggressive sales targets and establish a regime of radical accountability for each store manager. It's not unusual for a retail business to set sales growth and other targets for each store. What differentiated Big Motor under Koichi's Reign was the consequences for missing Targets In the words of one Anonymous employee, When Koichi took over, the company changed 180 degrees and the system changed. That's when power, harassment, and frequent Personnel changes and emotions started.
Koichi set up group chats with the messaging app line which all 300 store managers were required to join. He would send hundreds of messages per day, micromanaging small decisions at each store, and publicly humiliating managers who were below their sales targets. One store manager leaked screenshots of his message history with Koichi. When Koichi was angry with him, he sent a message saying education and death penalty over and over again.

It's unclear what he was trying to convey. In another instance, an employee failed to do something Koichi asked him to do. so. He sent him a bunch of text messages which roughly translate to scum, rubbish and junk.

Koichi would randomly show up to each store to conduct what he called environmental inspections. If anything was not to his liking, he would demote the store manager on the spot, leading to a significant decrease in salary. One of Koichi's biggest sticking points was that he didn't want any trees or Shrubbery obstructing the view of the cars from the street. He would have store employees use herbicides and other tools to destroy any veg rotation between the parking lot and the street.

These actions were almost always in violation of city ordinances. When you set excessive standards for employees, they'll do whatever it takes to meet them regardless of ethical or legal boundaries. For example, Koichi would closely monitor the Google reviews of each store and demote the manager if they were not good enough so managers would create numerous fake Google accounts and leave fraudulent. 5 Star Reviews Koichi maintained an internal Ledger of all the store managers.

Each store had a sales Target To meet managers who missed their Target, would have their salaries reduced and that money would be given to the managers who exceeded their targets. This created a massive incentive to exceed or at least meet the Targets. Managers who are on track to miss their Targets always have won. Final trump card to play fraud.

Thank you! In or around 2021, some insurance companies started to notice unusually high repair bills from Big Motor, so they started a preliminary investigation. They came into contact with the Big Motor employee who said he was ordered by his boss to over repair cars and built the insurance company for these inflated costs. They confronted Big Motor about this and Big Motor agreed to conduct an internal investigation. Big Motor conceded that there had been improper billing in a limited number of cases, but this was due to quote lack of skills of repair workers and mistakes in administrative coordination.
Unquote, They vigorously denied that these issues were intentional. they were isolated incidents and they would make sure they didn't happen in the future. One of the insurance companies Tokyo Marine wasn't buying it. They could see that almost all of Big Motors locations were sending them abnormally High bills.

They didn't trust the internal investigation and they wanted Big Motor to hire an outside Law Firm to conduct an independent investigation, but shockingly, one of Big Motor's other Insurance Partners Sampo was against an independent investigation. They said everything was fine and nobody should look into the matter anymore. Shortly thereafter, Big Motor instructed its salespeople to only refer buyers to Sampo. There appears to have been a quid pro quo between Sampo and Big Motor.

Sampo would turn to Blind Eye to the insurance fraud and Big Motor would help Sampo gain greater market share by only recommending Sampo Insurance to car buyers. Remember that Koichi used to work at in dozens of Samba employees took managerial positions at Big Motor. This was a lucrative arrangement for Zompo, as they received more than 10 billion yen or about 70 million dollars per year in insurance premiums from Big Motor referrals. They possibly figured that the over billing was a price worth paying for this market share, and at the end of the day, it was the consumers that paid the price.

When you get into a car accident, the insurance company generally views you as a more risky driver and your insurance premiums will increase. When Big Motor overbuild for a repair, Sampo paid for it initially, but they would eventually recoup this loss by raising the insurance premiums for the unsuspecting policyholder who ends up putting the bill in the long term. In early 2023, the walls finally came crashing down. A video leaked on the internet showing a Big Motor employee showing his colleagues how to puncture a customer's Tire with a screwdriver.

After that, numerous employees anonymously testified that they had been told to intentionally damage customer. Vehicles This included slamming socks filled with golf balls onto the cars and scratching the paint with screwdrivers. With the Smoking Gun evidence in the public domain, Big Motor finally bowed to the pressure and hired an outside Law Firm to conduct an independent investigation. The results were released in the summer of 2023.

Out of 104 employees surveyed, over 60 percent of them said that they had been ordered by their supervisors to intentionally damage cars to receive bigger Insurance payouts for the repairs. This was ultimately the result of Koichi's unrealistic sales targets and Draconian incentive structures as they were being exposed, Big Motor Senior Executives attempted to cover up the fraud. They ordered all employees to delete their line messaging apps in an attempt to destroy incriminating evidence. The they also made pathetic attempts to explain away the illegal cutting of roadside tires in front of Big Motor stores.
In an official press release, they said Street trees and Shrubbery at several of our stores were likely to have died due to the effects of herbicides used during store cleaning activities. I Don't know of any herbicide that can cut down a full-grown tree leaving only a stump. Big Motor and Sampo Insurance are currently being investigated by Japan's Financial regulator. It is unclear at this point if criminal charges will be filed, but either way it looks like it's game over for the company.

Founder and President, Hiroyuki Kanoshige and his son Koichi have both resigned in disgrace. Hiroyuki gave a public press conference where he apologized for the fraud. Koichi, on the other hand, has made a concerted effort to avoid the media and has increased security around his. Mansion Sails have decreased substantially at almost all Big Motor locations as consumers have understandably lost confidence.

They have already started closing some of their stores and instituted a hiring freeze. They have 60 billion of debt equivalent to about 400 million dollars banks are now unwilling to lend to them given their deteriorating Financial condition. With this, what was once Japan's most popular car dealership has met its untimely demise. All right guys, that wraps it up for this video.

What do you think about Big Motor? Let us know in the comment section below. As always, thank you so much for watching and we'll see you in the next one! Wall Street Millennial Signing out.

By Stock Chat

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27 thoughts on “Big motor: the fraud that shocked japan”
  1. Avataaar/Circle Created with python_avatars oderisson says:

    classic capitalism. everything is ok, except getting caught.

  2. Avataaar/Circle Created with python_avatars EnsignGeneric says:

    Alright, who had "Company with slightly modified Umbrella Corp logo turns out to be evil" on their bingo card?

  3. Avataaar/Circle Created with python_avatars r Negoro says:

    Actually a lot of dealers do this .

  4. Avataaar/Circle Created with python_avatars OldLeatherHands&Friends says:

    I wonder if him getting a masters in business in the US had anything to do with how he ran that company. I mean it sounds like he ran it like the typicall US corporation these days in the US.

  5. Avataaar/Circle Created with python_avatars DrScopeify says:

    That is pretty strange becasue large used car companies in the US like CARMAX or Carvana do not offer any car repair services as the verity of cars that they sell is so large they can't possible be able to repair all of types of cars they sell. Maybe this company only offered a few types of used cars? Just seems so odd.

  6. Avataaar/Circle Created with python_avatars Support Malphite says:

    I love when people’s idiotic kids shid and fard all over their parents’ businesses

  7. Avataaar/Circle Created with python_avatars Larry says:

    Short man complex

  8. Avataaar/Circle Created with python_avatars Sean says:

    Just cos the father is a smart businessman don't mean the kid or kids will grow up to be one

  9. Avataaar/Circle Created with python_avatars TheGreatveemon says:

    hope Japan have lookout for that piece of shit son in-case he attempting to escape the country.

  10. Avataaar/Circle Created with python_avatars Devanshu Dhall says:

    In india its common in banks to sell financial products which are completely useless this case is very much similar to this

  11. Avataaar/Circle Created with python_avatars encinobalboa says:

    Japanese dictionary has a new entry for "idiot".

  12. Avataaar/Circle Created with python_avatars eka nanda says:

    Maybe if Koichi friends don't ridicule Koichi as Conan he would be a humble man and not a sociopath who doesn't take other input. That's why you shouldn't ridicule someone condition

  13. Avataaar/Circle Created with python_avatars Amoroso Gombe says:

    Nepo baby trashed it all.

  14. Avataaar/Circle Created with python_avatars Nic Tse says:

    That's the umbrella corporation logo

  15. Avataaar/Circle Created with python_avatars Ravarsen says:

    Pretty sure it’s his American degree that turned him into a Napoleon

  16. Avataaar/Circle Created with python_avatars hiroman says:

    Video suggestion: Top 10 Legendary companies and conglomerates f*cked up by spoiled junior heirs.

  17. Avataaar/Circle Created with python_avatars The Gray says:

    This is why nepotism is more destructive than malaria.

  18. Avataaar/Circle Created with python_avatars Julien Bongars says:

    Looks like Koichi was a little short on ethics.

  19. Avataaar/Circle Created with python_avatars Abu Feras Abdullah says:

    THAT MBA 💥💥💥

  20. Avataaar/Circle Created with python_avatars HavenCat says:

    Japan is quite crazy

  21. Avataaar/Circle Created with python_avatars Darren Dent says:

    Im shocked this happened in Japan if anything.

  22. Avataaar/Circle Created with python_avatars proad lekopy says:

    When love blinds

  23. Avataaar/Circle Created with python_avatars 8PMFORMULA says:

    They let a 5 foot 3 guy bully them.

  24. Avataaar/Circle Created with python_avatars Quang Truong says:

    Dude went to America and learned how to business fraud. LoL

  25. Avataaar/Circle Created with python_avatars Blue Mangos says:

    And here I thought Japan could do no wrong. 😂

  26. Avataaar/Circle Created with python_avatars Simple Mechanics says:

    Insurance is always SCAM

  27. Avataaar/Circle Created with python_avatars Winger222 says:

    The son should of started work as a mechanic instead of going to business school. Would of learned the real reason why his dad was able to grow his company…

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