IoT, blockchain technology — salvation for used car dealers

FMCCAM to introduce IoT-powered platform to consolidate 2nd-hand car inventories


It IS hard to associate second-hand car dealership with the latest technologies, big data or shared resources. For decades, the sector which generate billions of sales annually has been very discreet, independent and closed.

But things are changing as competition rises, consumers rush to buy new cars with plenty of discounts being offered, reversing 20 decades of stagnating sales.

Used car dealers are now turning to the Internet of Things (IoT) and blockchain technology for salvation, injecting a new lease of life into the sector.

Federation of Motor and Credit Co Association of Malaysia (FMCCAM) president Datuk Tony Khor Chong Boon said the association will introduce a new IoT-powered platform to consolidate inventories held by all registered second-hand car dealers nationwide.

Khor said the integrated database will allow dealers to gain access to stocks information within their networks, improve sales process and protect customers — a multi-pronged approach to regain customer confidence in the used car market.

“The system is a consumer-to-business (C2B), business-to-business (B2B) and business-to-customer (B2C) combined. The C2B is when used car dealers bid for customers’ cars directly and thus eliminate the need for a middleman. Meanwhile, the B2B and B2C are about shared stocks information among the dealers.

“They can straight away know whether the specific model requested by customers is available or not in their own or other members’ inventories,” Khor told The Malaysian Reserve (TMR).

The online platform changes the whole spectrum of second-hand car business — from customers selling to dealers; dealers buying from customers; dealers trading between dealers and customers buying from dealers.

Such system could increase the sector’s efficiency which for decades has depended on the traditional way by having discussions at a car dealer’s shop to complete a sale.

Khor said FMCCAM, which has some 3,700 registered motor vehicle dealers nationwide, is expected to introduce the system by the fourth quarter of this year.

He added that it would also facilitate some 50,000 new and used car salesmen throughout the country to carry out sales.

The new online platform is being developed by a technology partner EZ Auto Sdn Bhd.

TMR reported last year that the used car industry is struggling to stay relevant due to price cuts for new cars, challenges to secure financing and low level of customer confidence.

For the past 20 years, Malaysia has seen new vehicle sales increased from about 200,000 annually to 600,000 today — Asean’s top three after Indonesia and Thailand.

But, the local used car market has remained subpar and it does not resemble global norms where its volume normally exceeds new cars.

In the last two decades, the used car market has remained flat at about 400,000 units sold a year, or just 70% of the new vehicle volume, compared to the US and Europe each at a 200% level and 150% in Japan.

Under the dealer transformation programme, Khor said FMCCAM will also launch its own online portal to advertise used cars.

He said the advertised used cars will be certified by FMCCAM to ensure the credibility of the information provided such as registration year, mileage and conditions.

Ultimately, he said FMCCAM wants to combat advertisements with dishonest information on various unregulated websites, which have eroded customers’ trust in the second-hand car market.

Overall, he said FMCCAM targets sales of used car segment to double to 800,000 a year in five years.