Steady outlook for used car market

The Star

14-07-2025

PETALING JAYA: Used car players expect year-on-year (y-o-y) sales to remain steady in 2025, on the back of a stable socio-political environment, favourable interest rates and aggressive promotional initiatives.
Carsome Group chief business officer Aaron Kee said used car sales typically mirror new car sales quite closely.
'With the new car segment expected to moderate after a record year in 2024, used car sales are also expected to come in moderately lower y-o-y.
'That said, Carsome continues to grow as a platform, driven by market share gains,' he told StarBiz.
Kee: Access to financing and interest rates remain accommodative, and we do not see a spike in non-performing loans.
According to the Malaysian Automotive Association (MAA), new vehicle sales hit a record high in 2024, rising 2.1% y-o-y to 816,747 units, supported by a resilient economy and broad-based improvements across all key sectors.
The MAA projects a slight slowdown to 780,000 units in 2025.
Kee noted that the recent sales and service tax (SST) announcement has dampened sentiment slightly, with more consumers adopting a wait-and-see approach.
'The uncertainty surrounding RON95 fuel subsidy rationalisation is also likely to influence car-buying patterns in the near term.'
Despite these headwinds, he said the local used car market remains relatively resilient compared with regional peers.
'In Thailand, new vehicle sales in the first five months of 2025 declined by around 3% y-o-y, while Indonesia saw a steeper drop with sales falling by approximately 5.5%.
'In contrast, Malaysia continues to benefit from a stable socio-political environment, favourable interest rates and a resilient domestic economy,' Kee said.
Meanwhile, Federation of Motor and Credit Companies Association of Malaysia president Datuk Tony Khor believes used car sales in 2025 will likely be 'on par' with 2024 levels.
'Used car sales are down 3% y-o-y in the first six months of 2025 (1H25). With the recent overnight policy rate (OPR) cut, we are hopeful that this will help reduce the costs of borrowing and boost spending.'
Khor: We expect used car companies' digitalisation efforts to boost car sales in the second half of the year.
Bank Negara cut the OPR by 25 basis points to 2.75% at its July Monetary Policy Committee meeting.
Khor also noted that many used car companies are accelerating their digitalisation efforts to drive sales.
'We expect these efforts to boost car sales in the 2H25. Hopefully, this will result in used car sales being on par with the levels achieved last year.'
He added that smaller used car companies that have yet to adopt digital marketing face the risk of falling behind.
'Therefore, we have reached out to the government, especially the Malaysia Automotive Robotics and IoT Institute (MARii), to assist these smaller used car companies fast-track their digitalisation initiatives.'
MARii is an agency under the Investment, Trade and Industry Ministry tasked with enhancing the competitiveness of the Malaysia's automotive sector.
Citing Carsome data, Kee said used car sales in 1H25 were broadly flat y-o-y, reflecting a more measured consumption backdrop.
'This is in contrast to the new car segment, which is expected to moderate after reaching peak volumes in 2024.
'That said, access to financing and interest rates remain accommodative, and we do not see a spike in non-performing loans,' he added.
This suggests that while consumers are more selective, credit availability and repayment capacity remain healthy, explained Kee.
'One area to watch is the spillover effect from new car competition into the used car market. We are seeing early signs of pricing pressure on younger used car vehicles in the one-to-three-year range due to heavy discounting in the new segment.
'Meanwhile, despite electric vehicle (EV) promotions intensifying in the new car market, we have not seen a material impact on used car demand.
'We expect the first wave of EV adoption to filter into the used market significantly over the next two years.'
Commenting on sales trends in 1H25, Kee said top-selling models across both new and used segments continued to reflect what buyers value most: affordability, practicality and long-term usability.
'Nationally, the Perodua Bezza, Myvi and Axia led new car sales.
'These models consistently perform well not just because of their price points, but because they meet core consumer needs such as low running costs, fuel efficiency and easy maintenance.
'In a more selective spending environment, these qualities matter even more, especially for first-time buyers and value-driven households.'
Kee emphasised that brand trust remains a key factor for buyers.
'Perodua and Proton have long established themselves as names that catered well to local conditions. Familiarity, strong resale value and access to service networks all contribute to sustained demand, particularly in the used car space.'
He said consumer preference is also shifting toward Chinese brands like BYD and Chery, where perceived value-for-money is beginning to outweigh traditional brand recognition.
Whether this trend will extend to the used car market remains to be seen, Kee added.