Malaysia Used Car Market Outlook To 2026F (Third Edition) – Demand for Used Cars Increased Due to Shift in User preference towards Personal Mobility, induced by Covid-19

The report titled “Malaysia Used Car Market Outlook To 2026F (Third Edition) – Demand for Used Cars Increased Due to Shift in User preference towards Personal Mobility, induced by Covid-19” provides a comprehensive analysis on the status of the used car industry in Malaysia. The report covers various aspects including volume of used cars & market size, production scenario of new cars in the country, target audience, growth facilitators, issues & challenges faced by the industry, and other aspects. Malaysia Used Car Industry report concludes with projections for future of the industry including forecasted sales revenue and volume by 2026F, market segmentations, Covid-19 impact and analysts’ take on the future.

Malaysia Used Car Market Overview and Size:

Malaysia Used Car sector is in the late growth phase, having grown at a CAGR of ~5.8% during 2015-2021. Increasing demand for private vehicles, increasing purchasing power, easy availability of finance, increased govt. incentives to ensure sale of new cars are the main reasons behind positive growth in used car sales revenue. Other major drivers include drop in use of public transport due to the pandemic and emergence of online players which have made the overall process of selling and buying used cars smooth, thus boosting sales.

Malaysia Used Car Market Segmentations

By Market Structure (Unorganized, and Organized): The used car market in Malaysia is dominated by unorganized dealers occupying ~58% market share with significant presence in Tier-2 cities and rural areas. While the organized channel is popular in urban cities and provinces, unorganized channels are predominant across rural areas outside the cities

By Sales channel (C2C, B2C/OEM, and Auction): B2C/OEM Organized market dominated the used car industry in Malaysia in 2021 on the basis of value and volume. ~ 80% of the used cars are either sold through the B2C dealers or OEM based captive dealers owing to  availability of several value added services The presence of major OEM is concentrated in the Kuala Lumpur, Selengor and other Tier-1 cities; However, Multi-brand dealers are present throughout the country, both online and offline.

By Source of Lead generation (Online, Dealership walk-ins): In Malaysia, Online platform is the most preferred method for lead generation for organized players as it eliminates middlemen and the commission margin associated with them. It offers a large variety of used vehicles on a single click and allows person to compare different vehicles at the same time. Moreover, large stock of used vehicles under one roof is time saving and considered as a convenient method. Therefore, this medium generates ~80% of the leads.

By Type of Car:  Sedans and hatchbacks are the most popular car types in Malaysia cumulatively accounting for ~66% of the used car sales. This is majorly due to the fact that it has both commercial and personal utility, mostly finding applications by young professionals, store/business heads, on- demand services like taxi and rental services.

By Price: The price range of MYR 30,000-50,000 accounted for highest percentage share of used cars in Malaysia in 2021.  Sedans and Hatchback are the most popular car models preferred by Malaysians, and a vast majority of them lie in this price range.

By Brand: Perodua is the market leader in Malaysia accounting for 32% of sale of used cars by volume. Brands such as Perodua, Proton and Japanese brands such as Toyota, Honda, Nissan are the most preferred due to strong brand preference, reliability, longer life span, and higher retention value of the used vehicle.

By Region: High urban population and disposable income in Kuala Lumpur & Selengor has led to generation of ~60% of the used car sales over these regions. Due to geographical factors, East Malaysia has a high demand on pickup trucks. East Malaysian cities such as Sabah, Kuching have sales generated majorly by pickup trucks that provide better power and maneuverability, especially for off road commercial applications such as logging, construction, and plantation

By Ownership Period: Since the finance for used and new car is readily available in the country the ownership period of the cars has been decreasing. Majority of the market share is acquired by cars having age of 4-6 years.

By Kilometers Driven: Cars with running of 80,000- 120,000 kilometers dominate the market. Vehicles used for commercial purposes such as taxis, rentals travel in excess of 40,000 kms every year

By Fuel: Cars running on petrol occupy ~81% of the Malaysian used car market in 2021. The adoption of electric vehicles is at a very nascent stage accounting for only 0.01% of the market currently.

Malaysia C2B Used Car Market:

C2B Platforms for used cars make the car selling process more convenient. Malaysia C2B used car market size was valued at MYR 18.2 Bn in 2021; recording a contraction of 7.9% CAGR in between 2016 and 2021 on the basis of GMV. The market is expected to witness a sales volume of 5,09,843 units through C2B channel in 2021 with a CAGR of 6.8% during the period 2016-2021.

Aftersales Service Market:

The automotive aftermarket service industry in Malaysia recorded a positive CAGR of 4.1% on the basis of revenue in between 2016 and 2021P. The automotive aftermarket deals with oil and lubricants, batteries, tires, filters, starters and alternators, coatings and paint consumables, exhaust components, spark plugs, crash parts, etc. Material and technology used for automotive manufacturing has improved from the past which increases the average age of vehicles.

Snapshot on Online Used Car Landscape

The online used car market has been emerging with the rise in the popularity of e-commerce platforms in the country. The growth of online advertising, which has fuelled the rise of online classified platforms such as Mudah.my, Motor Trader, Carlist.my, WeMotor and others have revolutionized the way in which pre-owned vehicles have been sold in the country. With the growth in the number of vehicles sold online, these players not only witnessed a sharp growth in marketplace revenue but also from other sources including advertisements, subscriptions and other value-added services. Players such as Carsome, MyTukar are a complete transaction marketplace that provide consumers a completely digital experienceand enable them to book test drive & buy used cars online. These platforms also provide ancillary services such as insurance, warranty, financing options & documentation support.   These transaction marketplace platforms are expected to demonstrate a ~25-30% CAGR till 2026 on account of growth in the online segment due to rapid internet penetration and increase in transaction volume due to preference of owning personal vehicles, mainly due to Covid-19.

Competitive Landscape of Malaysia Used Car Market

There exists Intense competition in the highly fragmented market with various OEM certified, brand authorized dealerships, multi-brand outlets & independent (standalone as well as clustered dealers) operating in the industry. Used Car Market in Malaysia has been dominated by B2C and OEM Dealerships which has captured a share of majority share in the sales volume of used cars during 2021. In the OEM segment, local brands Perodua and Proton together account for ~53% of the market. Price, age and residual value of the vehicle, brand value, maintenance required are some of the most important factors impacting the preference of consumer. Almost every brand offers services such as 24/7 roadside assistance, free inspection, easy exchange & more under their certified pre-owned program to attract more number of customers

Malaysia Used Car Future Outlook & Projections

The used car industry is expected to demonstrate strong demand arising due to preference of personal vehicles over public transportation, mainly on account of Covid-19 pandemic. The sales of economical cars are also expected to increase over the forecast period. Use of advanced technologies such as AI to valuate car online by looking at the pictures only, 360 degree view of the interiors of the car, etc to enhance digital experience of consumers. FMCCAM is planning to introduce new online marketplace and look for used car financiers from Japan, China and Taiwan so as to increase used car sales.

Key Segments Covered

By Market Structure

Organized

Unorganized

By Sales Channel

B2C/OEM organized

C2C

Auction

By Source of Lead generation

Online

Dealership walk-ins

By Car Segment

Sedan

Hatchback

SUV

MPV

Pickup trucks

Others (convertibles, coupe, sports vehicles, etc)

By Price

Less than MYR 30,000

MYR 30,000-50,000

MYR 50,000-70,000

MYR 70,000-90,000

More than 90,000

By Brand

Perodua

Proton

Honda

Toyota

Nissan

Others (Mitsubishi, Mazda, Mercedes, Audi, etc)

By Region

Kuala Lumpur

Selengor

Johor

Penang

Perak

Others

By Ownership period

Less than 2 years

2-4 years

4-6 years

6-8 years

More than 8 years

By Mileage

Less than 20,000

20,000-50,000

50,000-80,000

80,000-120,000

Above 120,000

By Fuel

Petrol

Diesel

Hybrid

Electric

Companies Covered

OEM Dealerships

Perodua Pre-owned

Proton Certified Pre-owned

Toyota Topmark

Mazda Certified Pre-owned

BMW Premium Selection

Mercedes Benz Certified Pre-owned

Online Portals – C2B platforms

Carsome

MyTukar

MyMotor

Online Portals – Online Auto Classified Platforms

Mudah.my

Motor Trader

Carlist.my

WeMotor

Motor Trader

Autocari

Oto.my

B2B Auction players

G-Mart

MUV

NG Chan Mau & Company

Pickles Auction

Key Target Audience

Used Car Companies

OEMs

Online Used Car Portals

Auction players

Used Car Financing Companies

Government Bodies

Investors & Venture Capital Firms

Used Car Dealerships

Used Car Distributors Auction Houses

Used Car Associations

Time Period Captured in the Report: -

Historical Period – 2015-2021

Forecast Period – 2021-2026F

Key Topics Covered in the Report

Executive Summary

Research Methodology

Malaysia Used Car Market Overview

Malaysia Used Car Market Size, 2015-2020

Malaysia Used Car Market Segmentation, 2020

Growth Drivers in Malaysia Used Car Market

Issues and Challenges in Malaysia Used Car Market

Regulatory Framework

Ecosystem and Value Chain of Used Car Industry in Malaysia

Customers Purchase Decision Making Parameters

Cross Comparison between Major OEMs and Multi-brand Dealers and Company Profiles & Product Portfolios

Snapshot on Online used car market

Snapshot on C2B and online classified market

Snapshot on Auction Market

Future Market Size and Segmentations, 2021-2025F

Covid-19 Impact on the Industry & the way forward

Analysts’ Recommendations