WHILE the used car market remains small in comparison to new cars, it has been gradually gathering momentum. In Southeast Asia, the top three biggest markets are Malaysia, Indonesia and Thailand with a market size of over US$40 bil (RM166.16 bil) in 2019.
The sales of used cars continue to sustain post-lockdown in several key markets including China as consumers are generally in favour of opting for private car ownership as opposed to taking public transport or even ride-sharing, according to Southeast Asia’s largest integrated car e-commerce platform, Carsome.
“We are positive that such growth is sustainable, more so where governments are introducing some form of tax reliefs for the automotive sectors to stimulate demand,” Mei Han, the CEO of Carsome Certified (the business-to-consumer [B2C] arm of Carsome) told FocusM.
“These factors translate to high growth potential within Southeast Asia and Malaysia.”
In its recent Carsome Consumer Survey, it was found that 79% of Malaysian respondents were wary about using public transportation and e-hailing services amid the COVID-19 pandemic.
As such, Carsome foresees demand within Malaysia’s automotive industry will continue to grow in line with its survey results of more Malaysians planning to buy and sell a car within the next few months.
Furthermore, with the global shortage of car parts such as electronic chips, coupled with the disruption in car assembly and manufacturing plants locally, Carsome expects short-to-medium term shortage of new car supplies, or delayed new car deliveries.
As such, used cars will make a far more attractive proposition as there is no waiting time for cars on top of being a more cost-effective alternative during crunch time.
What is worth noting is that despite the pandemic which has hit many businesses around the world, Carsome successfully achieved its V-shape recovery in June last year, only after two months of resuming its business in May 2020.
This success is attributed to its management who were able to quickly capitalise on the fact that most Malaysians respondents were sceptical about using public transportations during the pandemic and pent-up their demands.
It has been a smooth journey for Carsome since then. In November last year, Carsome celebrated its 100,000th seller and in December, the company announced that it has raised a US$30 mil all-equity Series D fundraise from strategic regional investors.
“The recent capital injection has allowed us to accelerate our B2C offering in Southeast Asia,” Mei Han remarked. “It also opens up potential merger & acquisition (M&A) opportunities in acquiring ancillary capabilities and consolidating our supply chain.
“I also aim to build Carsome Certified into a full-fledged e-commerce platform that gives the best value proposition to consumers.” – April 7, 2021