Malaysia Used Car Market Outlook to 2029

The report titled “Malaysia Used Car Market Outlook to 2029 - By Market Structure, By Manufacturers, By Types of KMs Driven, By Age of Vehicles, By Age of Consumers and By Region.” provides a comprehensive analysis of the used car market in Malaysia. The report covers an overview and genesis of the industry, overall market size in terms of revenue, market segmentation; trends and developments, regulatory landscape, customer level profiling, issues and challenges, and comparative landscape including competition scenario, cross comparison, opportunities and bottlenecks, and company profiling of major players in the Used Car Market. The report concludes with future market projections based on sales revenue, by market, product types, region, cause and effect relationship, and success case studies highlighting the major opportunities and cautions.

Malaysia Used Car Market Overview and Size

The Malaysia used car market reached a valuation of MYR 12 Billion in 2023, driven by the increasing demand for affordable vehicles, growing population, and changing consumer preferences towards more cost-effective transportation solutions. The market is characterized by major players such as Mudah.my, Carlist.my, Carsome, myTukar, and Sime Darby Auto Selection. These companies are recognized for their extensive distribution networks, diverse vehicle offerings, and customer-focused services.

In 2023, Carsome launched a new online platform to enhance customer experience and streamline the purchase process for used cars. This initiative aims to tap into the growing digital market in Malaysia and provide a more convenient car-buying experience. Kuala Lumpur and Penang are key markets due to their high population density and robust automotive infrastructure.

Market Size for Malaysia Used Car Industry on the Basis of Volume Sales in Units, 2018-2023

Source: TraceData Research Analysis

What Factors are Leading to the Growth of Malaysia Used Car Market:

• Economic Factors: The economic downturn and the high prices of new cars have significantly shifted consumer preference towards used cars. In 2023, used cars accounted for approximately 65% of total car sales in Malaysia, as they offer cost savings of up to 40% compared to new vehicles. This trend is particularly pronounced among budget-conscious buyers who are looking to minimize expenses.

• Growing Middle Class: The expanding middle class, with limited disposable income, is increasingly opting for used cars as a viable alternative to new vehicles. In recent years, the middle-income population in Malaysia has grown by 12%, and this demographic shift has driven demand for affordable and reliable transportation solutions. Used cars provide an accessible entry point to car ownership for many in this income bracket.

• Digitalization: The rise of online marketplaces has revolutionized the way consumers purchase used cars, enhancing transparency and convenience. In 2023, around 40% of used car transactions in Malaysia were conducted online, reflecting a growing trend towards digital channels. These platforms offer comprehensive vehicle listings, price comparisons, and customer reviews, which have significantly boosted market growth by making the buying process more accessible and user-friendly.

Which Industry Challenges Have Impacted the Growth for Malaysia Used Car Market

• Quality and Trust Issues: Concerns about the quality and condition of used cars remain significant challenges. According to a recent industry survey, approximately 50% of consumers are hesitant to purchase used cars due to fears of hidden defects and a lack of transparent vehicle histories. This issue has led to a lower trust level among buyers, potentially deterring up to 22% of prospective purchasers.

• Regulatory Hurdles: Stringent regulations concerning vehicle inspections and emissions standards can limit the availability of certain older or high mileage used cars. In 2023, it was reported that around 20% of used cars offered in the market failed to pass the mandatory inspection standards. These regulations can impose significant costs, particularly on smaller dealerships and private sellers, making it challenging for them to comply.

• Financing and Credit Access: Limited access to financing and credit options is a critical barrier in the used car market, particularly affecting lower-income consumers. Data indicates that approximately 38% of potential buyers face difficulties in securing financing for used car purchases. This limitation not only restricts market access for a significant segment of the population but also constrains overall market growth.

What are the Regulations and Initiatives which have Governed the Market:

• Vehicle Inspection Regulations: The Malaysian government mandates regular vehicle inspections to ensure that used cars meet specific safety and environmental standards. These inspections are required annually and focus on critical aspects such as brakes, lights, and emissions. In 2022, approximately 75% of used cars passed the inspection on their first attempt, indicating a significant compliance level among vehicles in the market.

• Import Restrictions on Used Cars: The government enforces strict regulations on the importation of used cars, including a maximum age limit of 5 years for most vehicles. Additionally, all imported vehicles must comply with the ASEAN safety and emissions criteria. In 2023, imports of used cars dropped by 8% due to stricter enforcement of these regulations.

• Government Incentives for Electric Vehicles: To promote the adoption of electric vehicles (EVs), the Malaysian government has introduced various incentives, including reduced import duties, tax exemptions, and subsidies. These incentives are particularly aimed at encouraging the entry of used electric cars into the market. In 2023, EVs represented about 3% of the total used car sales, a number expected to grow as these incentives take effect.

Malaysia Used Car Market Segmentation

• By Market Structure: Local dealers dominate the market due to their strong presence in communities, established trust with customers, and ease of accessibility. They often provide personalized services, flexible financing options, and better understanding of local market needs. OEM Certified Dealers hold a significant share because they offer certified pre-owned vehicles that come with warranties and have undergone rigorous quality checks. This assurance of quality and reliability attracts consumers willing to pay a premium for peace of mind.

• By Manufacturer: Toyota is the leading manufacturer in the used car market due to its strong reputation for reliability, extensive service network, and high resale value. The brand loyalty and trust among consumers make Toyota the preferred choice. Honda follows closely due to its well-known durability, fuel efficiency, and a strong reputation for producing reliable vehicles. Honda's extensive dealer network and good resale value also contribute to its popularity.

• By Mileage: 50,000-80,000 KM mileage range offer a balance between price and remaining lifespan. They are perceived as having reasonable wear and tear, making them a cost-effective choice for many buyers

Competitive Landscape in Malaysia Used Car Market

The Malaysia used car market is relatively concentrated, with a few major players dominating the space. However, the entrance of new firms and the expansion of online platforms such as Mudah.my, Carlist.my, Carsome, myTukar, Sime Darby Auto Selection, Carizarz, MT Digital, Carcity have diversified the market, offering consumers more choices and services.

Some of the recent competitor trends and key information about competitors include:

• Mudah.my: As one of the leading online marketplaces in Malaysia, Mudah.my recorded over 6 million monthly visitors in 2023, marking a 20% increase in user engagement compared to the previous year. The platform’s extensive vehicle listings and comparison tools have made it a go-to resource for car buyers in Malaysia.

• Carlist.my: A popular online automotive marketplace, Carlist.my saw a 30% increase in sales of certified pre-owned vehicles in 2023. The platform's focus on providing detailed vehicle histories and customer reviews has been well received by buyers looking for transparency and reliability.

• Carsome: Known for its comprehensive inspection and certification process, Carsome reported a 25% growth in used car sales in 2023. The company's emphasis on providing a seamless online-to-offline buying experience has contributed to its strong market position.

• myTukar: Specializing in facilitating quick and hassle-free used car transactions, myTukar saw a 15% increase in sales in urban centers like Kuala Lumpur and Penang. The company’s innovative auction-based model has been particularly successful in attracting budget-conscious buyers.

• Sime Darby Auto Selection: The automotive division of Sime Darby Berhad sold around 10,000 used vehicles in 2023, with a significant portion coming from their enhanced digital sales channels. The group's focus on integrating online and offline sales experiences has helped increase customer convenience and overall sales volume.

What Lies Ahead for Malaysia Used Car Market?

The Malaysia used car market is projected to grow steadily by 2029, exhibiting a respectable CAGR during the forecast period. This growth is expected to be fueled by economic factors, increasing urbanization, and rising consumer confidence in the used car market.

• Shift Towards Electric Vehicles: As the Malaysian government continues to promote green energy initiatives, there is anticipated to be a gradual increase in both the availability and demand for electric used cars. This trend is supported by government incentives and a growing consumer awareness of environmental sustainability.

• Integration of Technology: The integration of advanced technologies such as AI and big data analytics in vehicle assessment and pricing processes is expected to provide consumers with more accurate and transparent information. This technological advancement will enhance market transparency, boost consumer trust, and streamline the buying process, making it more efficient and user-friendly.

• Growth of Certified Pre-Owned (CPO) Programs: The market is seeing a growing trend towards certified pre-owned programs, where used cars undergo rigorous inspections and come with extended warranties. This trend is particularly strong among premium and luxury car segments, catering to consumers who seek assurance and quality in their purchases. The increasing availability of CPO vehicles is expected to attract more buyers who prioritize reliability and post-purchase support.

• Focus on Sustainable Practices: There is a rising trend towards sustainable practices within the used car market. This includes initiatives such as eco-friendly dealerships, the use of recycled materials in vehicle refurbishments, and efforts to offset carbon emissions associated with vehicle sales and usage. These practices are becoming more important to environmentally conscious consumers and are expected to influence buying decisions.

Future Outlook and Projections for Malaysia Used Car Market on the Basis of Volume Sales in Units, 2024-2029

Source: TraceData Research Analysis

Malaysia Used Car Market Segmentation

• By Market Structure:

  • Auction Companies

  • C2C, Local Dealers

  • Multi-Brand Non-Franchise Dealerships

  • OEM Certified Dealers

  • Organized Sector

  • Unorganized Sector

  • Commercial Vehicles

• By Manufacturer:

  • Honda

  • Toyota

  • Proton

  • Perodua

  • Nissan

  • Hyundai

  • BMW

  • Mercedes-Benz

• By Type of KMs Driven:

  • <50,000

  • 150,000

  • 50,000-80,000

  • 80,000-150,000

• By Age of Vehicle:

  • 5 years

  • 1-2 years

  • 3-5 years

• By Age of Consumer:

  • 18-34

  • 35-54

  • 55+

• By Region:

  • Northern

  • Southern

  • Central

  • Western

  • Eastern

Players Mentioned in the Report:

• Mudah.my

• Carlist.my

• Carsome

• myTukar

• Sime Darby Auto Selection

• Caricarz

• MT Digital

• Carcity

Key Target Audience:

• Used Car Dealers

• Online Car Marketplaces

• Automotive Financing Companies

• Regulatory Bodies (e.g., Ministry of International Trade and Industry)

• Research and Development Institutions

Time Period:

• Historical Period: 2018-2023

• Base Year: 2024

• Forecast Period: 2024-2029