1. The Used car industry is burgeoning with immense future potential owing to the growth of Online Platforms
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The sales of used cars have relatively remained flat over the last 5 years with average ticket size growing at a modest ~1%. However, post-pandemic, the market has gained momentum due to the easy availability of used car loans by various banks and NBFCs that have led to the amplification of pre-owned car sales. Also, increasing internet and smartphone penetration leads to high sales facilitated by online platforms such as Carsome, MUV, MyTukar etc. The market is anticipated to witness impressive growth in the coming years as dealerships are expected to increase their online presence on online platforms or through their own websites and Instagram to boost sales. In addition to this, leveraging technologies such as Artificial Intelligence and Virtual Reality to enhance user browsing experience and car inspection will further drive the growth of the sector.
2. Online platforms generate ~80% of the leads by virtue of access to a large inventory base and an easier user interface that gives users a number of choices to choose from
In Malaysia, an Online platform is the most preferred method for lead generation for organized players as it eliminates middlemen and the commission margin associated with them. The online channel offers a large variety of used vehicles with a single click and allows people to compare different vehicles at the same time. Moreover, a large stock of used vehicles under one roof is time-saving and considered a convenient method whereas dealership walk-ins are usually referred by relatives or friends. They are preferred by customers who are not having their trustworthiness towards online platforms. Also, due to the popularity of online channels, the majority of the unorganized dealers are listing their inventory through these channels.
3. High urban population and disposable income in Kuala Lumpur and Selengor have led to a generation of ~60% of the used car sales over these regions
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The Klang valley comprising Kuala Lumpur and Selangor accounts for the highest used car sales in the country (>60%) due to the high urban population and disposable income in the region and the presence of a large number of dealerships and used car exchanges. It is highly expected that in the future, Selangor will contribute to the highest percentage share of used vehicles on account of a growing number of employed individuals in this region coupled with rising infrastructural development and the building up of new residential hubs in the region.
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