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KUALA LUMPUR, October 11 – An increase in demand for used vehicles has accelerated in the third quarter (Q3) of this year and dealerships continue to post a strong recovery in sales, driven by the moratorium and tax incentives of the government.
The president of the Federation of Motor and Credit Companies of Malaysia (FMCCAM), Datuk Tony Khor, said that July year-on-year sales increased more than 25 percent to 37,800 units, while August and September registered year-on-year growth of more than 17 percent.
“Government incentives during the motion control order (MCO), especially the tax exemption and moratorium, drove more sales since June.
“We secured sales of 112,400 units during the last three months. Third-quarter sales brought the year-to-date (YTD) figure to around 280,000 units and we could match the industry average annual sales as demand remains strong in light of the ongoing tax holidays, ”he said. to Bernama.
He said the average annual used car turnover in recent years has been hovering around 400,000 units worth more than RM15 billion in total, based on an average value of RM40,000 per unit.
Khor, who has been in the industry for over 30 years, now manages 4,325 distributors under the GFCCAM umbrella.
He said used vehicles have become the most popular product in the industry, as consumers prefer to drive their own cars during the Coivd-19 pandemic and buy used vehicles to save money in the uncertain economic climate.
“The strong demand for used cars during the MCO is for cars with an average value of between RM30,000 and RM40,000.
“Those new salable, used cars also follow. The number one used car for sale on the market is Perodua Myvi. It is the most (wanted). Myvi is number one, ”he said, adding that other popular variants include Vios (Toyota), City (Honda), Saga and Persona (Proton).
“The business is dynamic, especially for the most salable low-mileage used cars. For example, Myvi may be only a few hours long and not stay long on dealer lots, so it rarely appears in the ad.
“Normally, Myvi (goes in) and (out) pretty quickly. For very salable models we don’t need to put too much advertising effort. Myvi’s lawsuit has also ensured that the model’s resale value remains high, ”he said.
According to the online used car data platform iCarData, the depreciation of a five-year Perodua Myvi 1.5 AV is 33.44%, or just over a third of the original purchase price.
In absolute value, a Perodua Myvi bought new for RM 56,518 without insurance in 2015 could average RM 37,619.99 in 2019.
By comparison, a Proton Iriz 1.6 Premium CVT that cost RM59,731 in 2015 could sell on average for RM30,277.32 in 2019, a depreciation of 49.31 percent, or nearly half, according to the report.
Khor cautioned that the jubilant trend in used car sales may be short-lived and that the exceptional season is likely to end after the expiration of the six-month loan moratorium.
“While the sales tax exemption is expected to keep demand stable, fourth-quarter buying sentiment is expected to turn cautious when the moratorium incentive ends.
“The buying mood has slowed down in October. We hope that the government can announce another three-month extension of the loan repayment moratorium until December 31 to further support the industry during the pandemic, “he added. – Bernama
