Malaysian Used Car Industry: An Overview

2015
Malaysian Used
Car Industry: An
Overview
Prepared by: Industry Research Department
Cardas Research & Consulting Sdn Bhd
A-15-10 & A-15-12, 15th Floor, Menara A
Prima Avenue, Jalan PU 1/39, Dataran Prima, 47301 Petaling Jaya,
Selangor, Malaysia
Website: www.crcg.com.my
Enquiry: [email protected]
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Malaysian Used Car Industry : An Overview
Table of Content
1.0
Executive Summary ............................................................................................. 4
2.0
Introduction ........................................................................................................ 5
2.1 Used Car Definitions ............................................................................................ 5
3.0
Industry Conditions .............................................................................................. 6
3.1 Market structure ................................................................................................. 6
3.1.1 Porter’s 5 Forces ........................................................................................... 6
3.2 Barriers to market entry ....................................................................................... 7
4.0
Market overview & Key trends ............................................................................... 8
4.1 Industrial trends ................................................................................................. 8
4.2 Dealers .............................................................................................................. 9
4.2.1 Chain Used Car Dealerships ............................................................................ 9
4.2.2 Franchised Used Car Dealerships ..................................................................... 9
4.2.3 Independent Used Car Dealerships .................................................................. 9
4.3 Growth Potential ................................................................................................ 10
5.0
Industrial drivers and Challenges .......................................................................... 11
5.1 Industrial drivers ................................................................................................ 11
5.1.1 Price ........................................................................................................... 11
5.1.2 Brand ......................................................................................................... 11
5.1.3 Model Range ................................................................................................ 11
5.1.4 Variant/Specification ..................................................................................... 12
5.2 Challenges ........................................................................................................ 12
5.2.1 Fraud Syndicate ........................................................................................... 12
5.2.2 New Policy................................................................................................... 12
5.2.3 Rate of Depreciation ..................................................................................... 12
6.0
Main Industry Players .......................................................................................... 13
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Malaysian Used Car Industry : An Overview
6.1 Company profiles ............................................................................................... 13
6.1.1 PROTO Malaysia Sdn. Bhd. ............................................................................ 13
6.1.2 Yap Brothers Group ...................................................................................... 13
6.1.3 Autoworld.com.my ....................................................................................... 13
6.1.4 Carlist.my ................................................................................................... 13
7.0
Conclusion and opportunities ................................................................................ 14
8.0
References ......................................................................................................... 14
List of Charts
Chart 4.1: Five year Malaysian GDP growth trend till September 2013 ................................. 8
Chart 4.2 Global Used Vehicle Depreciation Trends ........................................................... 8
Chart 4.3: Malaysia Employment Trend, 2009-2013 ......................................................... 10
Chart 4.4: Malaysia Statistic’s of drivers, 2008-2012........................................................ 10
Chart 5.1: Factors Driving Searching for a Used Car......................................................... 11
List of Tables
Table 2.1: Pros and Cons of New Car and Used Car........................................................... 5
Table 3.1: Popular Used Car Search by Customer ............................................................. 6
Table 3.2: Price Range of Used Car ................................................................................. 6
List of Figures
Figure 3.1: Used Car Porter's 5 Forces ............................................................................ 6
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Malaysian Used Car Industry : An Overview
2.0 Introduction
Currently, used vehicle prices have improved dramatically
over the past few years. Used vehicle always relate to the
rate of depreciation since that the price of used vehicles will
face some loss to certain amount depending to the global
market.
New
vehicle
market, used supply and economic conditions played
important roles either the used vehicle market rise of fall.
In Malaysia, used car business is driven mainly by third
party companies, including franchise and independent car
dealers, rental car companies, leasing offices, auctions and
private party sales. As a developing country, the necessity of
car is increasing as car is use for bringing people to go to
work. This situation has led to demand on used car which
can be considered as an opportunity to get the best car for
their money. With buying used car, people can find a latemodel used car priced at less than half the cost of a new one.
Used car can be find easily today as there are many car
websites that offer used car with good and reasonable price
such as carlist.my, mudah.my autoworld and many more.
Thus, this give more opportunity to society to consider used
car as the right choice and make price comparison before
buy it.
2.1 Used Car
Table 2.1: Pros and Cons of New Car and Used Car
Definitions
A used car, pre owned car or
commonly known as second
hand car in Malaysia is vehicle
that has previously one or more
retail owners.
Advantages
New Car
Brand New
Used Car
More Affordable
Could be lower in
maintenance cost
Less burden
Under warranty
Pay minimum
interest for loan or
even not required
loan
Glamour
Personality
Expensive
Disadvantage
Minimum
depreciate loss
Save in insurance
premium
Second handed
Pay more loan
interest
certain need
higher
maintenance cost
Higher
depreciation loss
Higher insurance
premium
Likely to
breakdown
Car loan may not
be available
High risk of stolen
Could be
accidented car
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Malaysian Used Car Industry : An Overview
4.2 Dealers
4.2.1 Chain Used Car Dealerships
Some
entrepreneurs
start
national
or
multinational
corporations
to
provide
inexpensive used cars to the community. These
large
chain
companies
offer
the
most
comprehensive warranties aside from certified
used cars from a franchised used car dealer.
Also, their cars are typically held to higher
quality standards than that of independent used
car dealers, due to the standardized checks
every car goes through before being offered for
sale.
Large
chain
companies
are
bound
to
burdensome corporate policies. This will make
them charge more than other used car dealer.
When the customer go to large shop chain
dealer ships, the sale representative do not have
the flexibility to adjust the prices. Customers are
cannot bargain with the dealers.
4.2.2 Franchised Used Car Dealerships
4.2.3
Independent
Dealerships
Used
Car
Several people prefer to shop at local stores and
usually the target market of independent used
car dealers is to sell it to local community and
are almost locally owned. Their profits normally
reinvested to local ecnomy. However, the
problem is national corporation do not account
the independent used car dealers. Consumers
will facing high risk when purchases the used car
from independent dealers.
Although there are risky, the advantages is
local car dealership offer lowest prices
traditionally. For customer that like to haggle,
the sales representative might be cut the prices
in certain situations. Conversely from other
dealer, independent used car dealers might also
sell lower quality vehicles because there are
some demand that customer would like to buy
lower quality cars at bargain prices just for
facilitate them to go to work. Some shoppers
will go gor consultation from mechanic before
buying from idependent used car dealers. Advice
from the mechanic, the shopper will apply on his
or her own judgement to a potential purchase
with low prices.
Franchises incorporate some of specific features
attributed to both independent and chain stores.
Corporations authorize entrepreneurs to sell
products under their banner. So, many will offer
quality assurance and warranty that compete
with national chain. Oftenly, they are owned by
local, which give advantage for the dealers to
adjust prices based on the needs of local
community.
Most franchises offer certified used vehicles
under the umbrella of the brand that they
represent. The quality for each location must be
rigid. However, the owner of car is allowed to
buy and sell cars according to his or her market.
Every local market is depend on specific set of
economic factors that affect the valuation of
vehicles. Although they offer more reliable
certification and assurance methods, the quality
of any used car are doubt. Thus, in general
franchised
dealerships
combine
some
advantages of corporate supervision with the
flexibility of local independent used car dealers.
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