The rise in used car prices is also being seen in Malaysia.
As automakers around the world struggle to keep their factories open and car production running due to COVID-19 and semiconductor shortages, it seems that the used car segment is taking advantage of this situation and having a good run.
This is happening because there is a shortage of new cars in the market and there are still many buyers receiving full salaries with less outgoing expenditures (no holidays, no dining out and no travelling and parking costs)
A recent news report from Japan has mentioned that used car prices in the country at a wholesale level are at their highest levels currently in over 10 years. Yes, the big wholesale car centres that cater to Approved Permit used car dealers in Malaysia who buy in bulk and import into Malaysia for sale is seeing a rise in values, especially for specialist vehicles and low volume cars.
Driven by an increased demand for personal transport during this pandemic and a shortage of supply on the market due to the semiconductor crisis, leading used car auction platform USS Co. has reported that its average auction price of ¥859,000 (RM33,000) in June for its stock was now up 18.8 percent from the same month a year earlier. More impressively too, this most recent figure was the 13th consecutive month in which prices were going up.
It is not just used car sellers that are the only ones making higher profits during this time too, as the number of used car leases has also skyrocketed in recent time. In fact, Tokyo-based car subscription start-up Nyle Inc. has announced that the number of lease contracts signed this June was up by six times year on year.
Then again though, it is not really all sunshine and roses for players in the used car industry during this time. And the primary cause of this dark cloud looming overhead stems from the dealers themselves not being able to get hold of cars at a reasonable price, with it currently not being all that uncommon for pre-owned cars to be trading hands for more than what they would have retailed for originally when new.
There are now even stories of some dealers throwing in the towel when it comes to procuring popular models for their inventory for the time being, as cars like the Toyota Yaris Cross and Suzuki Jimny are apparently now being bought and sold for several hundreds of thousands of yen more than their initial asking price in the showrooms.
Now, this issue in Japan will likely affect our local auto industry too. Especially in coming months when the large number of used Japanese grey-import cars start coming back into Malaysia.
So it stands to reason then that when the procurement prices for cars are higher over there, it would unsurprisingly cause a knock-on effect on the eventual asking prices for cars when they eventually make it over here too. Those intending to procure an Alphard or any other Japan-spec car therefore might be better off buying now, particularly when re-cond cars are currently (and astoundingly) eligible for a 50 percent SST exemption.
As for the wider used car market situation locally on the other hand, sales of pre-owned cars in Malaysia remains stable and in fact starting to fall as many units from all brands have been coming into the online classifieds.
There has only been a recent significant spike in rare collectable Japanese domestic cars like the Nissan 180SX, the Mazda Efini, Toyota Celica and Honda Integra which we have been observing throughout this pandemic.
Research and Text by Joshua Chin
