Khor said about two thirds of new car buyers typically traded in their vehicles, resulting in a comparable reduction of used cars entering the market. — Picture by Farhan Najib
By Zarrah Morden
Thursday, 16 Jun 2022 9:55 AM MYT
KUALA LUMPUR, June 16 — Supply disruptions affecting the delivery of new vehicles have slowed the inflow of trade-ins to the used marketplace, said Federation of Motor and Credit Companies Association of Malaysia president Datuk Tony Khor.
A global shortage of some parts, such as microchips, meant there was now a backlog of over 80,000 new vehicle deliveries in Malaysia, The Star reported him as saying.
“So, they (the buyers) have opted to hold onto their current vehicles. This has led to a lack of supply in the used car market,” he said in the report.
“The demand for used cars shot up eight per cent in the first quarter of 2022 and the price also rose about five per cent for cars less than five years of usage.”
Khor said about two thirds of new car buyers typically traded in their vehicles, resulting in a comparable reduction of used cars entering the market.
“But there is no significant price increase in the consumer market as it’s currently being absorbed by car dealers, so we are getting a lesser profit margin,” he said in the report.
Carsome Certified Malaysia general manager Alan Cheah corroborated Khor’s remarks, saying there was an increase in demand for used cars on the e-commerce platform that he attributed partly to the slower delivery of new vehicles.
However, Cheah said this has been offset by more people selling their used vehicles in the wake of the Covid-19 pandemic.
“While tax exemption constitutes one of the attributed factors for customers selling their cars as they seek to buy new cars, there are a few other reasons, such as the new work-from-home routine, which doesn’t require them to drive as often or own so many cars at once,” he was quoted as saying.
In a separate report, Malaysian Automotive Association president Datuk Aishah Ahmad said the waiting period was between two and four months for popular brands such as Proton, but could be as long as six months for in-demand models such as the X50.
She also told the English daily that the MAA has urged the Finance Ministry to extend the sales tax exemption on new vehicle purchases to assist in the motor industry’s recovery.