There is a bit of paradox in the economy. While the general economy has been battered by the Covid-19 pandemic, the automotive sector is reporting robust demand, especially so in the used-car market which recorded a 100% increase in June over the previous year, according to the Malaysian Automotive Association.
There are four main factors for the robust used-car market. People are fearful of public transport and the chance of being infected by Covid-19; the pandemic has forced people to the internet and online car-bidding platforms in a way that would never have been possible without the virus; there is a shortage of new cars because assembly plants and sales showrooms have suffered shutdowns; the used car e-commerce community has seized this unique opportunity to grow unhindered by physical contact and the fear of infections.
MUV and Mudah.my are the latest in the e-commerce community to offer what used-car buyers want: a used car with a warranty so that they don’t bust their monthly expenses if the second-hand car breaks down.
On Aug 18, MUV and Mudah announced their partnership to create the largest selection of inspected and used cars with warranty in Malaysia.
Through this alliance, Mudah introduced a vehicle inspection and protection programme in which buyers are offered an extended warranty to protect against future repair costs.
Car registration and ownership details are validated, similarly with the two dominant car-bidding platforms, Carsome and MyTukar. The second-hand cars are inspected comprehensively so that the insurers are willing to extend the warranty for the cars that qualify.
Though there are no details yet, it’s certain that the new owners who have purchased the extended warranty will be obliged to service the cars at a nominated panel of workshops and at a pre-determined schedule of engine lubricant changes and replacement of oil and air filters, among others. They should be aware that the insurance companies will void the warranty at the slightest technical infringement such as overdue servicing.
This alliance between MUV and Mudah is a good fit because while MUV is Malaysia’s first end-to-end vehicle bidding platform, it also suffered from a relatively lethargic pace of bidding action. On the other hand, Mudah is Malaysia’s largest e-commerce site with over 7.5 million unique visitors a month and over 60,000 cars for sale.
The addition of MUV’s brick-and-mortar origins – it’s a subsidiary of the Tan Chong group, which also includes Nissan and Renault franchises – with its network of physical facilities and trained inspectors, it’s the perfect match for the purely online Mudah.
But this is not the end of the game. One more player, ezAuto.my, may soon announce a revamp with new financing and partners to take it back into the game, playing on its main strength of its partnership with the Federation of Motor and Credit Companies Association of Malaysia.
But that could also be its main weakness, similar to MUV: in both cases, the controlling stakeholders are a generation of people who are not digital-natives.
The two dominant online bidding platforms in Malaysia are Carsome and MyTukar. Both of them account for up to 60% of the 30,000+ used car sales a month (except MCO-ordained shutdown months).
Carsome is a pioneer of the online bidding platform and its two digital-native founders have bought a controlling stake of 19.9% in iCar Asia from the Australian-based Catcha group, to form what could be Southeast Asia’s largest car-bidding e-commerce platform.
MyTukar has new owners, the Singapore-based Carro group, which also has regional ambitions in digitising the used-car marketplace.
It’s not all about buying used cars though. Mobility-as-a-Service is being offered in various fledgling initiatives such as Flux which offers a car subscription service from one month up to 36 months and SoCar which is an app-based car rental service.
On this note, as Malaysians celebrate the 64th anniversary of Merdeka, let’s give a hurrah to the used-car community where competition has benefitted used-car buyers with warranties and money-back pledges.
The views expressed are those of the writer and do not necessarily reflect those of FMT.
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