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Thursday, November 3, 2016

Used car dealerships facing tough times

However, high-end cars such as BMW and Mercedes Benz are recording growth in sales.
PETALING JAYA: During this challenging economic times, the used car dealership business is definitely suffering.
With a host of new and affordable Proton cars now being made available, on top of banks slowing down in giving out loans for first-time buyers, second-hand car dealerships have seen a major drop in sales this year when compared with 2015.
TopMark, a second-hand car dealership in Klang Valley, said these were “challenging times” for second-hand dealerships.
“Our sales have dropped 40 to 50 per cent when compared with last year,” Joseph Chin, branch manager of TopMark, told FMT.
Kon Wai Luen, who is editor of iCarAsia, echoed Chin’s sentiments, citing a variety of factors contributing to the drop in second-hand car sales.
“I feel it all boils down to weak consumer sentiment.”
Explaining, Kon said Malaysians were more cautious with their expenditure as the cost of living is rising.
He noted, however, that the “luxury segment”, which comprises of high-end cars such as BMW and Mercedes Benz, was actually recording growth in sales.
“I think the middle segment – the Toyotas and the Hondas – are suffering the most because people used to be confident about owning a Honda, but now they may be more cautious and may resort to buying a smaller car instead, for example.
“Separately, our industry sources also told us that Bank Negara’s tightened policies have resulted in a higher rejection of loan applications by the banks.
“This affects the smaller segment, involving the Proton and Perodua cars,” said Kon.
iCarAsia runs Carlist.my, which is an online portal where sellers of all kinds – private used car sellers, established used car dealers and new car dealers – advertise.
It is a platform for anybody to sell their vehicles online.
Like TopMark, Kon stated that the drop in sales is significant in 2016 when compared with 2015.
According to Kon, 431,791 units were sold from January to September 2015. During the same period in 2016, only 370,871 cars were sold.
“That’s a drop of about 60,000 cars!”
He said Malaysians were still buying cars but some segments were hit worse than others.

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