13/04/2026

Editorial T: 03-7784 6688 F: 03-7785 2625 E: sunbiz@thesundaily.com Advertising T: 03-7784 8888 E: advertise@thesundaily.com

SCAN ME

MONDAY | APR 13, 2026

M’sian auto sector needs ‘exit lane’ amid vehicle oversupply

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

PETALING JAYA: Malaysia needs to find ways to absorb an oversupply of vehicles as falling resale values and cheaper new cars weigh on the used car market, according to industry observers. Automotive industry analyst Hezeri Samsuri said the country must find an exit for the growing number of vehicles in the market. “Perodua is paving the way to export used Peroduas to developing nations such as Sri Lanka and Bangladesh, and to Africa, among others. This is a good move and we hope it will spur a new and strong industry,” he told SunBiz . He said used car prices are likely to continue declining unless measures are introduced to address the growing oversupply of vehicles in the market. “If the government realises that the gap between low used car prices and new car prices is getting bigger and bigger, they either have to speed up what Perodua is doing, or cut the loans down to seven years or introduce a cash for clunker pro gramme with a bigger carrot to dangle and is opened to all brands, unlike the RM4,000 matching grant programme they just introduced to national brands only,” he said. Hezeri said Malaysia’s used car market functions similarly to those in other countries, where demand largely determines market conditions. However, he noted that demand is currently slowing as more consumers opt to buy new vehicles. Hezeri said, “The biggest differ ence between Malaysia and other countries is that we have a very high motorisation rate, and car loans can stretch up to nine years. This means

o Used car market grapples with falling resale values, entry of cheaper new models as number of vehicles in the country keeps growing

US$19.86 billion in 2026, with the total value expected to reach about US$27.04 billion by 2031, repre senting a compound annual growth rate of about 6.36% during the forecast period. Demand for used vehicles is supported by several structural factors, including rising household spending, affordability consider ations and policy developments under the National Automotive Policy, which have gradually liberal ised the automotive market and expanded the future supply of preowned vehicles. In terms of vehicle type, sedans currently account for the largest share of used car transactions, while SUVs are expected to be the fastest growing segment in the coming years as consumers increasingly prefer higher driving positions and better flood clearance. The growing availability of SUV models in the secondary market is also contri buting to the segment’s expansion. The industry is also becoming more organised, although traditional independent dealers still dominate a large portion of the market. Organised platforms and certified preowned programmes are expand ing as consumers seek greater transparency, vehicle inspections and warranty coverage when pur chasing second-hand cars.

attractive product packaging, the overall market landscape has changed.” He said the new entrants have introduced highly competitive pricing, forcing traditional market leaders such as Japanese brands and other automakers to slash prices to levels that would have been unthinkable five or six years ago. “As newcomers shake up the market, existing players with limited upgrades in product features have little choice but to cut prices to clear inventory.” Shahrul Farhan said the easier affordability of new cars often with very low downpayments has created new challenges for existing car owners looking to replace their vehicles. “Trade-in values have dropped significantly as the used car market weakens, creating a domino effect that is also damaging the used car sector. Dealers are forced to buy low and sell low, with margins shrinking, and many avoid holding large inventories to protect cash flow,” he

Malaysians have too many cars per household and our long loan tenureship lowers our monthly instalment which allows car companies to put higher prices as consumers can still afford them.” This situation, he added, has been going on for a long time and it is okay as long as the motorisation rate is lower and there is no market disruptors such as newer brands with lower price tags. “Malaysians will have to dispose of their current cars or they will just keep their old cars if they want to buy new vehicles. If they can’t do both, sales of new vehicles will be negatively affected,” Hezeri said. Meanwhile, Jetour Auto Malaysia market research and product marketing executive Shahrul Farhan Abdul Wahab said the entry of Chinese automakers in recent years has reshaped the automotive land scape. “As many Chinese players entered the market in the last couple of years, bringing more affordable EVs and competitive ICE vehicles with more

Hezeri (left) and Sharul Farhan.

added. The disruption has benefited consumers, who now enjoy more choices and more competitive pricing. “For buyers, used cars are cheaper and there are more options available. But for businesses especially used car dealers and the reconditioned vehicle segment the impact has been severe,” Sahrul Farhan said. He added that the market could take two to three years to stabilise as established automakers respond to the competitive pressure from Chinese brands. Industry data by Mordor Intelligence estimates the Malaysian used car market was valued at about US$18.67 billion (RM74 billion) in 2025 and is projected to grow to

‘Water stress looms as long-term constraint on growth’

Housing projects will be completed on time: Nga TELUK INTAN: The Housing and Local Government Ministry has given an assurance that housing projects nationwide will be completed on schedule despite facing the ongoing global energy crisis following the West Asia conflict. Housing and Local Government Minister Nga Kor Ming said a meeting will be held with stakeholders in the near future to discuss measures to ensure the targets are met. “We are working with our stakeholders, including the Real Estate and Housing Developers’Association, the Master Builders Association Malaysia and others, to ensure that planned projects can be implemented according to schedule. “That is why a meeting will be convened soon, and I have instructed the National Housing Department to slightly relax requirements and further facilitate housing projects, especially affordable housing projects.” Nga said this at a press conference after the Sentuhan Kasih Aidilfitri event here on Saturday, in response to concerns among homebuyers worried that their housing projects may be delayed due to the global energy crisis. Meanwhile, Nga said low-income groups will continue to enjoy a subsidy of RM20,000 for Rumah Mesra Rakyat projects under Syarikat Perumahan Negara Bhd. The government remains committed to helping this group own homes by maintaining the payment rate at RM55,000 compared to the actual cost of RM75,000 per unit. – Bernama

added. However, Santiago stressed that the issue cannot be left to the government alone. “This is not just a government problem; it requires an all-of-society approach. When people contribute, they also develop a sense of ownership over how water is managed.” The implications extend beyond house holds and utilities. Santiago warned that as Malaysia positions itself to attract data centres and other water- and energy-intensive industries, water availability could become a binding constraint. “The availability of sufficient water is fundamental to any development. If we do not manage this properly, it will affect our ability to support new industries,” he said. Santiago cautioned against complacency, noting that while Malaysia is not facing an immediate crisis, long-term planning must account for future risks. “We may not face water bankruptcy today, but we plan for the next 30 years. If we do not prepare now, we will face serious challenges down the line.” Santiago called for stronger leadership and accountability to drive reforms across the sector, from river management to consumption patterns. “This should be a wake-up call. We need leadership, we need accountability, and we need to start managing our water resources with the seriousness they deserve.”

addressed,” he said. At the core of the issue is a growing imbalance between supply and demand. Santiago noted that river systems – the backbone of Malaysia’s water supply – are showing signs of strain. “The carrying capacity of many of our rivers has declined. They are not able to

Ű BY JOHN GILBERT sunbiz@thesundaily.com

KUALA LUMPUR: Malaysia must confront mounting structural challenges in its water sector or risk constraining future economic growth, particularly as climate pressures intensify and new industries drive higher demand. Former National Water Services Commission (SPAN) chairman Charles Santiago ( pic ) said many of the issues facing the sector today are not new, but have remained insufficiently addressed over time. “The challenges we are talking about today – non-revenue water, tariffs, recycling, reclaimed water – these are issues we saw many years ago. They are challenges we are dealing with now, and they will remain challenges in the future if we don’t act decisively,” he said at the Malaysia Energy, Water and Climate Change Summit 2026 recently. Santiago pointed to climate change as an increasingly critical factor shaping water availability and management, warning that its impact has yet to be fully integrated into policy and planning. “Climate is going to put pressure on how we manage water – whether it is reclaimed water or the availability of water itself. This is something we have not sufficiently

sustain long-term demand the way they used to. That is a serious concern for the country,” he said. Rising costs are compounding the problem. While water remains relatively affordable for con sumers, Santiago said, this has contributed to inefficiencies and overconsumption. “We have made water too cheap and too accessible, to the point that it is being abused. In some areas, consumption is far above what is actually needed.” Santiago said pricing mecha nisms will need to be revisited

alongside broader structural reforms, including efforts to tackle non-revenue water – long identified as a persistent weakness in the system. “One of the proposals I had put forward was for consumers to contribute a small additional amount through their bills to address non-revenue water. Even a modest contribution, over a defined period, could help fund the necessary improvements,” he