PETALING JAYA: Used car players are generally expecting steady year-on-year growth for 2024, underpinned by the good sales performance so far and positive economic fundamentals.
Carsome Group’s chief business officer Aaron Kee said he is “very positive” on the company’s used car sales performance for 2024.
“In May 2024, Malaysia overtook Thailand as South-East Asia’s second-biggest auto market. Sound government policies and the strengthening ringgit also contributed to higher purchasing power among Malaysians.
“We foresee positive momentum for Malaysia’s used car market that, barring any unexpected market disruptions or unforeseen policy changes, can equal if not exceed 2023’s results,” he told StarBiz.
Carsome is South-East Asia’s largest online used car trading platform.
Kee said Carsome’s year-on-year sales of used cars have shown “remarkable growth” this year. “For example, our retail arm, Carsome Certified, saw double-digit growth in car sales in the first half of 2024 compared to the corresponding period in 2023.
“This strong performance reaffirms the effectiveness of Carsome’s strategy in strengthening customer trust, expanding our market presence and leveraging technology and data to enhance the overall car buying and selling experience in Malaysia.”
Meanwhile, Federation of Motor and Credit Companies Association of Malaysia president Datuk Tony Khor noted that used car sales up to the month of July this year had been good.
“We started to see a slight slowdown in sales in August. Month-on-month, used car sales were down by 15% in September.”
Khor said he expects a downtrend in sales in the last quarter of 2024.
This, he said, was mainly due to aggressive promotional and marketing campaigns by non-used car players, especially China-based auto companies, as well as the implementation of electronic invoicing (e-invoice) for vehicle purchases.
“Non-used car players, especially China-based companies, have been aggressively promoting their vehicles and providing attractive pricing.”
Khor noted that automakers in China offered hefty discounts to “aggressively grow their market share”.
“These Chinese car manufacturers are coming in directly into Malaysia, instead of appointing a distributor.
“Some of these companies have slashed their prices by as much as 40% in China and we can see similar trends over here in Malaysia, making it hard for local players to compete.”
Separately, Khor said the government’s e-invoicing implementation has been a cause of concern for local used car dealers.
The Inland Revenue Board announced in May 2023 that it would implement e-invoicing in stages, with the first set kicking off from Aug 1, 2024.
Traditionally, banks offered loans of up to 90% of the vehicle price.
However, sales agents have been known to “mark up” the price in the invoice when a loan request is submitted to a bank, resulting in the approved loan amount matching or exceeding the actual car price.
This would allow the potential buyer access to a full (or 100%) loan.
With the implementation of e-invoicing, full loans will no longer be possible (back to 90%). This, Khor said, is already affecting car sales. He explained that the automotive sector currently contributed an estimated 4% to Malaysia’s annual gross domestic product (GDP).
“Malaysia aspires to be an Asean automotive hub. But to do that, we will have to compete with the likes of Thailand.”
Khor pointed out that Thailand’s automotive sector accounted for about 10% of the country’s GDP. “The more cars we sell, the bigger the contribution to the country’s GDP. We urge the government to consider postponing the e-invoicing implementation, as we believe that it will have an impact on the automotive industry.”
For 2024, Khor is hopeful that used car sales will be able to “at least match” last year’s performance. “We hope sales in 2025 will be better,” he said.
Meanwhile, Kee said Carsome intends to continue improving its after-sales, insurance and financing offerings to provide dealers and customers with a more comprehensive package, as customer satisfaction remains the company’s priority.
Riding on its strong performance in 2023 and so far this year, Kee said: “For Carsome, we fully intend to capitalise on this growth. For example, we have secured over RM200mil in fresh working capital through partnerships with Ambank Group and Maybank. Carsome also has achieved positive earnings before interest, taxes, depreciation and amortisation for two consecutive quarters of 2024.”
In terms of preferred car models, Kee said the most popular and top-selling used car models during the first half of the year were the Perodua Myvi, Perodua Axia, Perodua Bezza, Honda City and Proton Saga.
“The dependability and inexpensive maintenance requirements of these vehicles are major factors contributing to its popularity among consumers of the used car segment. It is well known that Perodua, Honda and Proton have significant brand recognition in Malaysia.
New Perodua models including Axia and Myvi being trailered from the plant to showrooms.
“These days, the younger generation in particular are more drawn to them because of their modern and minimalist features.”
Kee noted that the new Perodua Axia that was launched in 2023 instantly gained popularity among used car buyers on its platform.
“The Perodua Myvi that was last refreshed in 2022 also enhanced its safety features, providing a safer car option for a much lower price.
“These technological innovations, to some extent, contribute to the higher demand of the said cars on our platform,” he said.
