With cautious sentiment driven by inflation and interest rate hikes, the growth in used car sales is projected to continue.
- Rising Demand: Used car sales to surge in 2023 amid cautious economic outlook.
- Affordable Option: Customers opt for pre-owned vehicles due to inflation and interest rate concerns.
- Online Platforms: Online platforms expedite used car buying and selling process.
- Growth Projection: Used car sales projected to grow 10% YoY in 2023.1.
- As per Ken Research, as Malaysia’s used car market gains momentum in 2023, economic uncertainties prompt customers to gravitate towards more affordable pre-owned vehicles.
1. Resilient Used Car Sales Surge in 2023 Amid Economic Caution
Malaysia Used Car Market Trends
The used car market in Malaysia has witnessed a resurgence in 2023, driven by economic caution and consumer preference for affordable pre-owned vehicles. Datuk Tony Khor, President of the Federation of Motor and Credit Companies Association of Malaysia (FMCCAM), underlines that factor such as inflation, interest rate hikes, and slower economic growth will influence consumer sentiment this year in a big way.
When economic conditions become uncertain, there is a tendency for customers to opt for cost-effective pre-owned vehicles, contributing to the growth of the used car segment.
2. Digital Platforms and Trade-ins Shape the Market Dynamics
Malaysia Used Car Market Scenario
Khor highlighted the vital role of online platforms in reshaping the used car market landscape. These digital platforms are expected to expedite and simplify the process of buying and selling used cars, providing both buyers and sellers with a convenient and efficient way to conduct transactions.
The trend of trading in old vehicles when purchasing new ones has gained traction. With around 65% of new car buyers opting for trade-ins, the supply of used cars continues to be supported by the constant influx of new vehicle sales.
3. Steady Industry Performance and Positive Outlook
Malaysia Pre-Owned Car Market Future Scenario
Recent data from the Malaysian Automotive Association (MAA) reveals a strong performance in the automotive sector. Sales of new vehicles witnessed a remarkable 39% surge to 62,649 units in the last month, underlining the market’s resilience.
The year-to-date sales volume for February highlights steady growth, standing at 112,128 units compared to the same period in the previous year. Passenger vehicle sales reached 55,555 units in February 2023, indicating a positive trend.
Further boosting the market, analysts project strong sales growth in March 2023, with Japanese car manufacturers capitalizing on fiscal year-end effects and the extended sales and service tax (SST) exemption. As the industry remains well-positioned, strong orders, steady input costs, and supply chain stabilization are set to propel the sector’s growth and earnings throughout the year.
Conclusion
According to Ken Research, as Malaysia’s used car market gains momentum in 2023, economic uncertainties prompt customers to gravitate towards more affordable pre-owned vehicles. With cautious sentiment driven by inflation and interest rate hikes, the growth in used car sales is projected to continue, supported by online platforms and the preference for personal transportation.
