Malaysia Used Car Market Outlook to 2027

Market Overview:

A fragmented market with immense growth potential the Used car market in Malaysia is highly competitive, with numerous players offering cold storage, transportation, and logistics services. This competition stems from the growth of Online Used Car Platforms, Increased Credit Availability and Car Ownership in Malaysia.

High preference for organized sales coupled with the emergence of online platforms for used car sales will continue to be a major aspect of Malaysia Used Car Market. Kuala Lumpur and Selangor is expected to have the highest demand for used cars owing to the population pressure leading to registration of ~25% of the vehicles in these regions. Malaysia Used Car industry is catered by the domestic and international players such as CarSome, Perodua, My Tukar, Toyota Topmark are amongst the top players in the industry.

Malaysia Used Car Market Analysis

• Malaysia Used Car Market is in the late growing stage with the prevalence of online players and OEM certified dealerships owing to increasing internet accessibility in the country.
• The boom in the number of online auto-classified platforms and the traction of the consumers towards online platforms is contributing to the inclining used car sales with wider reach and convenience.
• The market is dominated by online players that offer a competitive pricing. OEM certified dealers have steadily started penetrating into the market
• Used Car companies are focusing towards providing value added services to end users by establishing partnerships with various stakeholders in the industry.
• In Malaysia, a typical transaction of a used-car sale starts with pre-work, followed by sale, loan application, loan processing and final closure.

Key Trends by Market Segment:

By Distribution Channel: The Malaysia Used Car Market is segmented by distribution channel into organized & unorganized. The leading meat products consumed in the country are beef and pork based. Majority of the companies prefer to seek services from non-captive companies with 2 years lock-in period. Generally, the companies prefer internal cold chain facilities. If contracted, it done for 1-2 years. Higher preference for organized sector as some unorganized used car dealers charges hidden fees such as tax and processing fees of MYR 4,000 - 5,000 on top of the car’s listed price.Organized sector is highly preferred owing to the more convenient buying experience and value-added services (warranty & certification) it offers to the consumers.

By Market Structure: The Malaysia Used Car Market is segmented by market structure into Preference for B2C is high as it offers more competitive services like repairs on used cars, leading to an increase in used car sales. OEM Authorized dealerships mainly sources used cars through trade-in with the same car brand. Higher trade-ins in Malaysia owing to preference for car upgradations among consumers have led rise in OEM inventory.

Competitive Landscape:

• Online marketplace and classified platforms generate their revenue through subscription based monthly business model or commissions charged on listed cars.
• Business framework should offer one stop integrated platform to ensure transparency and trust throughout the customer journey
• A new player entering the Malaysia Used Car market can choose from different online and omni-channel business models
• my has the highest number of listings as it focuses on increasing the online engagement through campaigns and promotions. Carsome is the major C2B and B2C platform in Malaysia.
• Carsome has a dealer and seller dashboard that provides a convenient way for dealers to participate in live bidding events for vehicles and sellers to list their cars and find buyers quickly

Recent Developments:

• In February 2022, Honda Malaysia (or the Company) launched its Honda Certified Used Car (HCUC) program today, allowing Malaysians to purchase a verified, preowned Honda vehicle through an easy-to-use and trustworthy platform. Honda Malaysia is dedicated to providing high-quality products and services, as well as ensuring that all of our vehicles, new or used, bring joy to their owners. As a result, they introduced HCUC as an additional option for customers to own their preferred Honda vehicles and enjoy the benefits of being a Honda owner.
• Funding societies for used car dealers and Used car management centers are the major developments by Proton in the Malaysia Used Car Market.
• Carsome plans to build more used car refurbishment centers in Malaysia, Indonesia and Thailand as the company expects the demand for pre-owned cars to continue growing in the next few years. In Southeast Asia, every year the trade of used cars is around USD 60 Bn.
• SME digital financing platform Funding Societies Malaysia will provide credit facilities for PROTON dealers to finance the purchase of second-hand cars for floor stocking.

Future Outlook:

• Malaysia Used Car Market will expand at a CAGR of 8.5% between 2022 and 2027 owing to the rising middle class and online used car platforms
• The boom in the number of online auto-classified platforms and the traction of the consumers towards online platforms will contribute to the inclining used car sales in the country.
• Used Car Sales in Malaysia will be driven by the Government regulation and price sensitive attitude of the population
• Rising demand for high quality vehicles in Malaysia will drive the demand for organized sales and OEMs and B2C segment in Malaysia in 2027.
• Perodua and Toyota will have huge preference in the market especially for Sedans and SUVs owing to large proportion of middle class in Malaysia
• Availability and affordability of used cars aged 4-6 years will increase their demand in the future. Kuala Lumpur will continue to be the used car hub of Malaysia