Japanese trading house Itochu Corp. plans to acquire used car dealership Bigmotor Co. mired in an insurance fraud scandal, sources with knowledge of the matter said Wednesday.

Itochu plans to take over Bigmotor's used car sales business in the hope of bolstering Itochu's existing automobile division.

File photo taken on Sept. 19, 2023, shows a store of Bigmotor Co. in Tama, Tokyo. (Kyodo) 

The trading house is the biggest shareholder in Tokyo Century Corp., which runs rental car services. It also counts Yanase & Co., an importer of luxury cars, as a subsidiary.

Itochu also plans to ensure that the founding family members of Bigmotor will not be involved in the business operations.

Bigmotor has been facing challenges in restructuring its business amid a significant decline in sales. The downturn follows revelations that the company charged excessive repair fees by intentionally damaging customers' cars and made fraudulent insurance claims.

Itochu, its subsidiary Itochu Enex Co. and investment fund J-Will Partners Co. have been assessing Bigmotor's assets since November after winning exclusive negotiation rights.

They were planning to make a final decision by this spring.