Customers opting for new cars as average price has dropped by 13% since 2014.
Price discounts and special packages are being offered for new cars, leading to lower sales of used cars.
Animesh Kumar, associate director of automotive consulting practice for research and consultancy firm Frost & Sullivan, said smaller used car businesses were badly affected, The Malaysian Reserve reported.
He said the average new car price had dropped by 13% since 2014, primarily driven by the government’s incentives for energy-efficient vehicles under the National Automotive Policy 2014.
Manufacturers are now offering five-year warranties for new cars, something used car operators cannot afford.
These are among reasons why customers are now opting for new cars, he added.
Animesh said the used car market was also plagued by issues such as customer confidence and stringent rules for loan approvals.
“Private financial institutions demand a higher down-payment, higher interest rate and shorter loan tenure.
“These requirements increase the monthly instalments and push them out of reach of some potential buyers.
“Smaller dealers will continue to go out of business.”
Federation of Motor and Credit Companies Association of Malaysia president Tony Khor Chong Boon said last month it planned to introduce a vehicle inspection system for members and a new online marketplace to help used car dealers stay afloat.
He said it would also look for used car financiers from Japan, China and Taiwan to address the industry’s problems.
The association represents 3,500 of the 5,000 used car operators.
Khor said the association had identified three main reasons for the situation: low level of customer confidence in used cars, value depreciation of second-hand cars and strict hire purchase financing.
Old cars need new market as dealers struggle to stay afloat
Used car business hits a bump
The views expressed in the contents are those of our users and do not necessarily reflect the views of FMT.
lagi info di : Gosip Artis Terkini