Demand for used cars stays brisk in 3Q

by BERNAMA / pic by MUHD AMIN NAHARUL

A SURGE in demand for used vehicles has accelerated into the third quarter (3Q) this year with dealers continuing to register a strong sales recovery, driven by the moratorium and government’s tax incentives.

Federation of Motor and Credit Companies Association of Malaysia (FMCCAM) president Datuk Tony Khor said year-on-year (YoY) July sales spiked over 25% to 37,800 units, while both August and September registered over 17% YoY growth.

“We secured sales of 112,400 units for the last three months. The 3Q sales brought the year-to-date figure to circa 280,000 units and we could match the industry’s average yearly sales as demand stays brisk in view of the ongoing tax holiday,” he told Bernama.

He said the average yearly turnover for used cars in recent years has been hovering around 400,000 units worth over 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 dealers under the FMCCAM umbrella.

He said used vehicles have become the industry’s hottest commodity as consumers prefer to drive their own car during the Covid-19 pandemic.

“The strong demand for used cars during the Movement Control Order was for cars of the average value of between RM30,000 and RM40,000.

“The No 1 sellable used car in the market is the Perodua Myvi. It is the most (sought after). Myvi is No 1,” he said, adding that other popular variants include Vios (Toyota), City (Honda), Saga and Persona (Proton).

According to an online used car data platform iCarData, the price depreciation for a five-year old Perodua Myvi 1.5 AV is 33.44%, or just over a third of the original purchase price.

In absolute value, a new Perodua Myvi priced at RM56,518 without insurance in 2015 could fetch RM37,619.99 on average in 2019.

In comparison, a Proton Iriz 1.6 Premium CVT that cost RM59,731 in 2015 could sell at an average of RM30,277.32 in 2019 — a depreciation of 49.31%, or nearly half, the report said.

Khor cautioned that the jubilant used car sales trend may be short-lived and the banner season is likely to end following the expiry of the six-month loan moratorium.

“Although the sales tax exemption is expected to keep demand steady, buying sentiment in 4Q is expected to turn cautious as the moratorium incentive ends,” he added. — Bernama