Malaysians Want Cars Cheap And Good

Malaysians are buying cars again. But not in the way it used to be. A survey was recently conducted by automotive content hub, WapCar, to understand the concerns of car buyers and how the automotive industry can meet their requirements.

The results of the week-long survey found that respondents are prudently opting to reduce spending and lower their budget for a car. Moreover, the respondents are concerned about taking public transportation due to the COVID-19 situation, preferring to drive to minimise exposure to others.

The findings reflect the car sales trend and the spike in demand for used cars in Malaysia in June. The Malaysian Automotive Association (MAA) reported that sales volume in June 2020 was 5% higher than June 2019. Concurrently, the Federation of Motor and Credit Companies Association of Malaysia (FMCCAM) noted a 100% year-on-year growth in June’s used car sales.

MAA expects the sales volume in July 2020 to be better, trending towards cheaper and fuel efficient cars. The government’s exemption on sales tax until 31st December will also help to spur demand.

Catch-22 Situation

The findings showed 57.9% of respondents will not take public transportation while 32.7% will, even though they are concerned about their health safety in light of COVID-19. Of the 318 respondents surveyed, many (55.4%) said they are reconsidering their plans to buy a car in the next 6 months.

It appears that while Malaysians are concerned about their safety, they will continue to take public transportation out of prudence or because they have no other alternative.

Affordable Cars Appear to be the Winners

The survey supported MAA’s announcement that car sales will trend towards cheaper and fuel efficient vehicles. Almost 47% of the respondents are only willing to spend less than RM100,000 for their next car purchase.

Price and discounts will influence the current car purchase decision with 83% of respondents noting these as the most important factors during the pandemic. The government’s sales tax exemption measure to boost the automotive industry appears to be a step in the right direction, aligned with the needs of the people.

Specifications and performance (74%) are also critical as with durability and fuel economy (63%). WapCar’s data from 9th March to 30th June 2020 showed an increase in search for car models that are practical and well-priced. This is evidence that people are looking for more bang, less buck in their next car. Among the top 10 most searched cars, nine have starting prices below RM100,000. These include models such as Honda City, Nissan Almera, Perodua Bezza, Perodua Axia, Perodua Aruz, Proton X50, Proton X70, Proton Saga, and Toyota Vios.

Good Customer Service is Key

The survey also showed 70% of the respondents are concerned about the economic situation and this has affected their decision in buying new cars. Moreover, almost 50% of them are extra cautious on their spending and prefer to save for emergencies instead of purchasing big ticket items such as cars in the next 6 months.

In the face of stiff competition from cheap used cars, car brands will have to up their customer service game in order to entice people to purchase new cars.

The majority of respondents like the idea of convenience and not being required to be physically present in a car showroom. In addition to online showroom (42.1%) and convenient online financial solution (55%), more than 59% of the respondents cited door-to-door test drive and delivery as a service that they are expecting from car brands.

The advancement of technology and the current situation of physical distancing are driving interest in online shopping for cars, aided by Virtual Reality (VR) or Augmented Reality (AR) for virtual test drive and livestreaming.

WapCar also recently introduced its VR Showroom, an interactive feature that allows 360-degree exterior and interior viewing from anywhere, at any time.