SHAH ALAM - The national automotive industry is facing an oversupply of used vehicles, which is expected to impact the sales of new vehicles.
Automotive analyst Hezeri Samsuri said the government needed to find a solution to address this issue, as it may lead to further complications.
He said several factors contributed to the oversupply of used vehicles, including intense competition among automotive companies.
"The fierce competition between established players and new brands from China has led to various attractive campaigns and promotions, such as free service campaigns for several years.
"This has indirectly prompted many to pick new vehicles that are more promising in terms of convenience and practical motoring experience," he said in an article on automotive portal careta.com, on Monday.
Hezeri added that the second factor was the rising cost of vehicle maintenance, which made people feel safer choosing new vehicles that came with service packages.
He noted that the hire-purchase tenure, which allowed contracts to extend up to nine years, also made down payments and monthly installments more affordable.
"This makes it easier for people to buy new vehicles, even though Bank Negara Malaysia allows loans of up to 90 per cent for used vehicles of popular brands under nine years old.
"Moreover, vehicles today are not as durable as they used to be. Japanese brands, once known for their vehicles lasting over a decade without major issues, have lost their edge.
"We now frequently hear about Japanese vehicles experiencing transmission problems within just three to five years. This is one of the reasons many are hesitant to buy used vehicles," he said.
Hezeri also highlighted the changing attitude of automotive buyers, who are now more willing to purchase vehicles from new brands without any historical track record in the country.
He said recall issues have also contributed to the oversupply of used vehicles.
"More buyers are now aware of recall issues, but they have no easy way to determine whether a used vehicle has been recalled or not.
"Furthermore, the government’s lax attitude towards protecting automotive buyers’ rights makes people hesitant to buy used vehicles.
"Issues like fraud by some used vehicle sellers, the accident-free status of used vehicles and mileage tampering are longstanding problems that have been overlooked by all government agencies," he added.