Used car sales in Malaysia steady despite pandemic – to match 400,000 units in 2019: FMCCAM president – paultan.org
The used car market in Malaysia, like the automotive industry as a whole, was severely affected by the arrival of the Covid-19 pandemic, though the local market has seen a rebound with the introduction of government incentives, and a flat year-on-year growth is expected for this year, The Star reported.
Used car businesses were severely impacted between March and May as a result of the movement control order, said the president of Federation of Motor and Credit Companies Association of Malaysia (FMCCAM) Datuk Tony Khor, who noted that the used car industry will effectively have had only nine months of business this year compared to other years.
“However, the sales tax exemption and six-month (loan) moratorium helped spur sales in the second half of the year, and we expect 2020 to be on par with last year, which isn’t bad,” Khor told the news daily, adding that the total volume of used car sales in 2019 was 400,000 units.
As of November 6 when Malaysian Budget 2021 was announced, finance minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said there will be no automatic extension of the moratorium, but assistance to eligible borrowers will be updated.
“Despite the economic uncertainty, used car sales have still been steady because the Covid-19 pandemic has deterred people from using public transport. Also, people prefer to buy used cars because they are cheaper,” Khor said, adding that Japanese cars were among the most popular among used car buyers.
The FMCCAM will be working on several initiatives to increase consumer confidence and drive growth in the local used car sector, the association president said. An online platform for 4,400 of its dealer members has been started, which will be a tool for the sourcing, inspection and valuation of used cars, and the platform will boost transparency and professionalism which will ultimately boost customer confidence, he said.
“New cars come with warranties that may last around five years. But we want to be able to offer warranties that will last up to 12 years, specifically for the used car’s engine and gearbox. Being able to offer something like that, it will help build confidence in purchasing used cars,” said Khor.
He added that customer confidence levels were a lot lower in Malaysia compared to countries such as the United States, Japan and in Europe. “In many countries overseas, the turnover rate of used cars are higher compared with new cars, however, in Malaysia, the turnover rate for used cars is 1.5% lower than new cars, because of weak confidence levels,” Khor noted.
The turnover rate 2.3 times higher in the US and 1.8 times higher in Europe. The performance of the used car sector next year will ultimately depend on how well the pandemic is contained, Khor said. “If the vaccine is quick and effective, then we believe that the next two-to-three years will be positive for the local used car sector,” he said.
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