Explore the Malaysia used car market forecast to USD 26.2 Bn by 2027 with insights on market trends, demand, competition, challenges, and growth opportunities.
Market Overview
Malaysia Used Car Market Overview
The revenue of the Malaysia Used Car Market amounted to MYR 17.5 Bn in 2022, recording an annual growth rate of 18.8%. The market is projected to reach MYR 26.2 Bn by 2027, expanding at a CAGR of 8.5% during the forecast period of 2022–2027. The growth of the Malaysia used car market is primarily driven by expanding vehicle ownership, availability of financing options, sales tax exemptions, and long waiting periods for new cars, which encourage consumers to opt for used vehicles.
Malaysia Used Car Market Definition
Definition of Malaysia Used Car: Malaysia used car market has been defined as the domestic sale of all types of used passenger cars (Multi-Purpose Vehicles, Hatchbacks/Economy Cars, SUVs and other cars including Sedans, Luxury cars and more) through both online channels as well as offline (Organized Dealers/Unorganized Dealers) channels. The sale of heavy commercial vehicles such as buses and trucks is excluded from the market. It includes the total Gross Transaction Value (GTV) generated from the sale of used passenger cars across Malaysia in a year from both organized and unorganized segments. It includes the dealership margin but excludes revenue generated from warranty, insurance or financial services.
Organized Sector: An organized dealer is defined as an OEM Certified/Authorized or a Multi Brand Dealership with more than 50 used cars in stock or that has more than one branch in Malaysia. Used car sales through auction houses & sales of repossessed cars by Banks & NBFCs have also been considered a part of the organized sector.
Passenger Vehicle: Passenger car includes vehicles having four wheels intended for the carriage of passengers and designed to seat no more than nine persons inclusive of the driver.
Multi-brand showrooms: It include standalone/clustered dealerships or showrooms that sell used cars of various brands through a physical store, having more than 50 units of used cars in stock or more than one outlet/branch across the country.
Standalone/clustered dealerships: These include those that have 1-50 units of used cars in stock on average or have only 1 branch across the country
OEM certified/ Authorized dealerships: It includes dealerships/showrooms authorized by OEMs/Brands to sell certified (under the certified pre-owned program) as well as non-certified pre-owned cars of the specific brand throughout the country.
Taxonomy
Malaysia Used Car Market Ecosystem
Market Size of Malaysia Used Car Market
The Malaysia used car market witnessed notable expansion over the historical period, growing from MYR 10.6 Bn in 2017 to MYR 17.5 Bn in 2022, registering a CAGR of 10.3% between 2017 and 2022. The market demonstrated steady year-on-year growth, reaching MYR 11.5 Bn in 2018, MYR 12.7 Bn in 2019, MYR 14.1 Bn in 2020, and MYR 14.7 Bn in 2021. Among these years, the highest annual growth was recorded in 2022 at 18.8%, followed by 10.9% in 2020, 10.6% in 2019, 7.9% in 2018, and 4.0% in 2021, reflecting strong demand recovery and increasing consumer preference for used vehicles.
Malaysia Used Car Market Industry Analysis
Extended warranty programs, OEM certified car labs, fund raising options and rise of used EVs are few trends and developments in the market that are influencing the used car industry in the Malaysia.
In 2022, FMCCAM has tied up with eAutoGen Capital to launch AutoGen Plus, an extended warranty programme for up to 10 years. Another after sales warranty program is Mudah.my’s Mudah Vehicle Inspection & Protection (mVIP) program in collaboration with MUV.
Carsome has introduced Carsome Certified Lab where all cars go through a 175-point inspection process. In Carsome PJ Automall, customers can view, test drive a car, and explore financing options and car aesthetics services in one location for total convenience.
Carsome has begun considering a U.S. initial public offering (IPO). With the IPO, it could seek ~USD 2 Bn in valuation. The listing might also be a merger with a special purpose acquisition company (SPAC) or a conventional IPO.
There are more than 10,000 EVs currently registered in Malaysia and the number is expected to increase with the arrival of BYD and Ora. Government is promoting EVs under MYR 100,000 in Malaysia. As more people continue to adopt EVs, there will be an increase in the number of used EVs in the market.
Increasing vehicle ownership among the middle class, availability of financing options, Sales Tax Exemptions and rising trade-in culture are some of the prominent growth drivers in the Malaysia Used Car market influencing the growth of the industry.
With the expansion of the middle class and growing economy, more Malaysians can afford to acquire an automobile. In Malaysia, the middle-class monthly income ranges from MYR 4,851 and MYR 10,970.
Financing alternatives for secondhand cars have become more readily available in the last several years. To make used automobiles more accessible to customers, banks and financial institutions in Malaysia provide loans and flexible financing programs designed specifically for them.
In June 2020, the Penjana, or short-term economic recovery plan, announced the exemption from automobile sales tax. This benefit was later extended until June 2022. Under the exemption, the sales tax on automobiles built locally is totally waived, while the sales tax on cars imported from outside is lowered from 10% to 5%, which lead to a significant growth in the market.
Financial hindrance, involvement of middlemen and domination of unorganized players are the major challenges in the Malaysia Used Car market. These challenges have impacted the growth of the market to a certain point.
The financial accessibility for obtaining vehicle loans is further restricted by a cap on the number of loans that an individual can take out due to Bank Negara Malaysia's (BNM) tightening financing guidelines. It is difficult for an non-Malaysians to take advantage of financing possibilities because the majority of Malaysian banks only finance about 70% of the total cost of used automobile purchases made by foreigners in the nation.
The price of used cars is almost equivalent to that of new cars due to the domination of the industry by "middlemen." It is challenging for dealers to acquire stocks directly from automobile owners. The price of some well-known brands has nearly matched the cost of a new automobile due to a MYR 3,000 increase in the price collected from middlemen. For example, a brand-new 2020 Toyota Vios (J Spec) is available at the price of MYR 78,000, whereas a pre-owned 2020 model is currently listed for MYR 67,000.
Unorganized and traditional dealers continue to dominate the industry. Price conscious & lower income customers prefer informal channels including local dealers, friends/relatives, roadside mechanics etc offering limited choices & deals, which is a major constraint for the growth in the market.
Malaysia Used Car Market Segmentation
Segmentation by Distribution Channel on the basis of Units sold in % (2022) Th Units, 2022
Organized sector is dominating the distribution channels of the market 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.
Segmentation by Type of Vehicle on the basis of Units sold Th Units, 2022
Sedans and Hatchbacks are ruling the market as young professionals, businesses and on-demand services largely uses Sedans and Hatchbacks. Higher demand for sedans in Malaysia is due to their affordability and higher resale value. In 2022, more than 70% of CARSOME’s total delivery consists of hatchbacks and sedans. SUVs captures over 21% of the Malaysia used car market followed by MPVs that rules over 12% of the market. Rest of the 6% market is highly fragmented and is divided among different vehicle types.
Future Outlook of Malaysia Used Car Market
The Malaysia used car market is projected to reach a market size of 586.5 Th units by 2027, compared to 419.3 Th units in 2022, reflecting strong expansion during the forecast period of 2022–2027. In 2023, the market is expected to record its highest annual growth rate of 9.7%, supported by several government regulations and the price-sensitive attitude of the population, which continues to favor used vehicle purchases over new cars. The market is estimated to reach 459.9 Th units in 2023, followed by 499.2 Th units in 2024, 523.8 Th units in 2025, and 554.5 Th units in 2026, with corresponding growth rates of 9.7%, 8.5%, 4.9%, and 5.9%, respectively.
The Malaysia used car market is anticipated to reach a market size of MYR 26.2 Bn by 2027, compared to MYR 17.5 Bn in 2022, growing at a CAGR of 8.5% during the forecast period of 2022–2027. The market is projected to reach MYR 21.4 Bn in 2024, followed by MYR 22.7 Bn in 2025 and MYR 24.5 Bn in 2026, with corresponding growth rates of 11.0%, 10.4%, 6.3%, and 7.5%, respectively. The growth of the Malaysia used car market is being driven by factors such as increasing vehicle ownership among the middle class, availability of financing options, sales tax exemptions, and a rising trade-in culture.
Malaysia Used Car Market Macroeconomic Indicators
In 2022, Malaysia's GDP was valued at USD 406.31 Bn compared to USD 320.2 Bn in 2017. The country witnessed negative growth in 2020 due to global pandemic COVID-19, Malaysia’s GDP was estimated at USD 337.4 Bn compared to USD 356.18 Bn.
In 2022, the total population of Malaysia was recorded at 32.7 million out of which 17 Mn were male and 15.7 were female. The sex ratio in Malaysia is 111 females per 100 males.
In the historical period of 2017 and 2022, Malaysia's market for passenger cars expanded at a compound annual growth rate (CAGR) of 4.5%, On the contrary, the commercial vehicles market grew at a CAGR of 4.9%.
Frequently Asked Questions
Find quick answers to common questions about the Malaysia Used Car Market
The Malaysia Used Car market was valued at MYR 19.4 million in 2023.
The future market size of the Malaysia Used Car Market is expected to reach MYR 26.2 million in the forecasted period of 2023-2027 growing at a CAGR of 8.5%.
Mudah, oto.mym mymotor, CARSOME, my Tukar, and WapCarsome are some of the prominent companies operating in the Malaysia Used Car market.
Increasing vehicle ownership among the middle class, availability of financing options, Sales Tax Exemptions and rising trade-in culture are the major growth drivers of the Malaysia Used Car market.
The Sedans car type is dominating the Malaysia Used Car market in the product type followed by Hatchbacks and others.
