LEIGH SALES, PRESENTER: In Japan, dogs now outnumber children under the age of six, with pet ownership soaring as the birth-rate plummets. The pet industry in Japan is worth $10 billion a year, but it has a dark side. 100,000 dogs are abandoned and put down every year, and there's no concept of saving a pet from the pound. North Asia correspondent Mark Willacy reports from Tokyo.

MARK WILLACY, REPORTER: This is not some fringe industry for the obscenely rich and tasteless. In Japan pampered pets abound. Chanel, Dior and Gucci stock luxury dog lines, pet salons are everywhere and dog beauty artists like Ryo Kikuchi command exorbitant fees.

RYO KIKUCHI, DOG BEAUTY ARTIST (translated): It's been two and a half years since we started this salon, and in that time we've doubled our business.

MARK WILLACY: It costs Junko Hirai $850 a month to bring her two poodles to this saloon - not that they always seem to appreciate it. While she insists they're part of her family, there is growing evidence that many Japanese treat their dogs as disposable.

TORU OKI, ANIMAL ACTIVIST (translated): People get a pet because they're cute, but these animals are not a fashion item. For some they go from being cute to being abandoned.

MARK WILLACY: Toru Oki has spent decades trying to change attitudes towards pets in Japan. He travels the country teaching people how to train and nurture their dogs, because every year hundreds of thousands of pets end up in the pound.

TORU OKI (translated): More than 100,000 dogs are being killed every year as well as more than 200,000 cats. There's not a history of rescuing these animals from the pound.

MARK WILLACY: Toru Oki has funded his great love of animals out of his great talent. Known as Japan's finest blues singer, Toru Oki has played to audiences across the world. And he's jammed with almost every blues legend, from BB King to Muddy Waters.

TORU OKI: He is King of the Boogie! John Lee Hooker, this is...

MARK WILLACY: Out of the money he's made from playing the blues, Toru Oki has spent $3 million on his crusade to save Japan's unwanted pets.

TORU OKI (translated): They're put down using gas but it wasn't until recent years they began using lethal doses. Before, they would be cremated while their hearts were still beating.

MARK WILLACY: Inside the Ehime pound in Western Japan, manager Yukihiro Kitagawa is preparing to dispose of another batch of dumped dogs. It's a job he would prefer not to do.

YUKIHIRO KITAGAWA, POUND CHIEF (translated): We do this job because it's our duty. But I believe people in Japan get cats and dogs too easily without understanding the responsibilities. Then they leave us to dispose of them when they don't want to care for their pets anymore.

MARK WILLACY: It may be established practice in countries like Australia to come to the pound and adopt a dog. Not so here in Japan because these dogs are seen as "soiled" or "second hand". They're hardly the status symbol people are seeking. They'd rather go to a pet shop and buy a pedigree puppy.

Nearly 5,000 cats and dogs end up in this one regional pound every year. Of those, less than 300 find homes. Those that can't fend for themselves, like newborns, are disposed of immediately, while the rest sit on death row for seven days. They're then sent into here - the place they call the "dream box" - where they're gassed.

After that, they're dumped inside an industrial-scale crematorium where thousands of pets are reduced to ash.

Back in Tokyo, Junko Hirai is having her pet party - pedigree only, of course. Although some of these designer dogs don't like being filmed.

(Dog barks)

For the host it's upsetting to think of dogs on death row in the pound, but she can't see many Japanese opting for a pound pet over a pedigree one.

JUNKO HIRAI, DOG OWNER (translated): I think it's up to individual people where they get their dogs. For example, you may want a pure breed, or a dog from a champion family.

MARK WILLACY: But today there is a happy ending at the Ehime pound for one lucky pooch. Toru Oki has come here to save one from death row - one he hopes to train for his therapy dog program in which he uses pets to help comfort and help the elderly and disabled.

Having already saved 500 dogs from pounds across Japan, he has limited space and funds to rescue more. But there is room for one.

TORU OKI (translated): I felt sorry for this dog the most. She is in a pitful condition. Nobody will ever adopt her. So this was her last chance.

MARK WILLACY: A few days later Toru Oki called with some surprising news. The dog he rescued gave birth to three puppies - so he'd saved four lives, not just one.