2025 will be the toughest year yet for the huge online used car platforms.
The once-mighty online used car platforms are facing a harsh reality check. After years of aggressive expansion, deep discounting, and investor-backed spending sprees, cracks are beginning to show. High turnovers, repeated job cuts, and constant restructuring have become common themes over the past year. What was once seen as a revolutionary business model—cutting out the middleman and digitizing the car-buying experience—is now proving to be financially unsustainable for many players in the industry.
Meanwhile, traditional used car dealers are mounting a strong comeback. They have adapted to new market dynamics by offering lower prices, better value, and a more personalized customer experience. Crucially, their operating costs remain far lower than their online-first competitors, allowing them to weather economic challenges more effectively. Unlike venture-backed startups that must chase explosive growth to satisfy investors, these privately-owned brick-and-mortar dealerships focus on profitability. They don’t need to promise sky-high returns—they just need to stay in the black.
The digital disruptors, on the other hand, are struggling under mounting financial pressures. High overhead costs, declining investor confidence, and the cooling of strategic partnerships have all contributed to their weakening position. Several overseas expansions have already collapsed or faced issues, and in Malaysia, signs of distress are becoming increasingly evident. Inspection centers and workshops are quietly shutting down, while reports of delayed payments to business partners are growing. The once-unstoppable momentum of these online platforms has come to a grinding halt.
As the battle for the used car market intensifies, the big question is: can these unicorns find a path to survival, or is the era of easy money and unchecked expansion coming to an end? The COVID era provided a temporary windfall, boosting online car sales when physical dealerships were restricted. But those conditions no longer exist, and the market has tightened. Many of these startups are burdened with multiple investors and creditors. If no one steps in with another round of funding, could the Malaysian government intervene to bail them out? Or will they be left to sink? Only time will tell.
