Healthy demand for entry-level and premium used cars

KUALA LUMPUR: Although the overall used car market is expected to drop 30% this year, some segments will continue to do well, especially that of entry-level small used cars and premium used cars, said iCar Asia Ltd.

Its head of content, Hans Cheong expects a healthy demand for entry-level small used cars priced RM60,000 and below, and dealers would have little problem shifting used Peroduas (preowned vehicles produced by Perusahaan Otomobil Kedua Sdn Bhd or Perodua).

He said demand would remain healthy for premium used cars valued RM150,000 upwards.

“The biggest contraction comes from cars aimed at the middle class. Family cars valued between RM60,000 and RM150,000 are moving very slowly and dealers might be reluctant to stock up more cars from this range,” he told Bernama.

The data retrieved from Carlist.my, an online classifieds platform facilitating the buying and selling of all types of cars, not just used cars, but also new ones, managed by Cheong and his team.

Listed on the Australian Security Exchange, iCar Asia owns and operates Carlist.my and regional network of automotive portals with clear leadership positions established in each of Asean’s three largest automotive markets – Malaysia, Indonesia and Thailand.

“Activities at used car dealers are slowing down significantly. However, we are still seeing a healthy number of private individuals opting to sell their cars online.

“The volume is not as much as in 2015, but the slowdown experienced in this segment is less than that seen among used car dealers,” said Cheong.

In a depressed market environment, he said more people would choose to sell their old cars online in order to get a better price for them.

In terms of price movement, Cheong said there was little for Proton and Perodua cars, whether used or new, as there was not much room for prices to drop further.

“The mid-upper and premium range cars are the ones that are seeing the biggest drop in new car prices, which in turn affects their resale value,” he said.

The reduction is due to tax incentives for locally assembled energy efficient vehicle (EEV).

“While their resale value in the short term might be affected, it’s more important for these brands to be able to grow in the longer term with more competitively priced cars, and EEV incentives helps them to do so,” he said.

Cheong said the leading premium brands were already promoting leasing schemes and certified pre-owned car programmes to keep the values of their used cars stable.

Meanwhile, Mudah.my, another online classified-advertisement website which caters primarily to the Malaysian market, said currently it has 104,618 active listings of private and company vehicles, including 11,341 luxury car ads.

“If 2017 will be yet another challenging year for the automotive industry, we hope to see (steady) demand in the used car segment. With cautious domestic consumer spending, we hope users would consider purchasing second hand cars either to upgrade or as first-hand users.

“We can see the increase of ads on our site, as this goes hand in hand with demand versus supply,” the classifieds company, which manages Malaysia’s largest marketplace, said in a statement.