Used-car dealers brace for further drop in prices
- From: fairplay <fairplay@xxxxxxxxxx>
- Date: Thu, 30 Mar 2006 09:15:19 -0600
Used-car dealers brace for further drop in prices
By Arman Ahmad and Sim Bak Heng
KUALA LUMPUR:
Used car prices are dropping, a week after the announcement of the National Automotive Policy.
Sales are becoming stagnant, and dealers are complaining of losses due to price drops.
Some with stocks of hundreds of cars are now in dire straits, as the marketplace slowly readjusts to compensate for lower prices of new cars.
One used car dealer, Sunny Ann, said the market was still uncertain and prices were fluctuating.
However, prices were falling and would most likely continue to fall.
"A 2001 Proton Waja now sells in the region of RM35,000. We used to sell it for more than RM40,000," he said.
Another car salesman, Sadir Ahmad Kunjoo, said there had been at least a RM2,000 drop across the board for most used cars.
"My friends in KL and Puchong have lost between RM50,000 and RM100,000 due to these price drops.
"Proton cars, especially, have lost their value," he said.
He added that people had been holding back on their purchasing decisions since Deputy Prime Minister Datuk Seri Najib Razak made the second announcement on Saturday.
Najib had said the Government was dissatisfied with the price cuts and wanted those in the industry to respond by cutting prices further.
Proton Holdings Bhd had reduced the prices of its new cars by 2.5 to seven per cent; Perusahaan Otomobil Kedua Sdn Bhd pledged a four per cent price cut; and UMW Toyota Motor Sdn Bhd slashed its prices by 5.6 to 11 per cent.
Elsewhere in the country, prices are also dropping after the revised excise and import duties for new cars under the National Automotive Policy were announced.
In Johor, prices have slipped by more than 10 per cent since last week.
Segamat Car Dealers Association chairman Pang Woo Gien said a price war was looming and consumers could expect more bargains.
"This is inevitable as new car prices are being revised downwards. But in the case of second-hand cars, the price reductions will be even bigger," he said.
Pang said as the industry adjusted to accommodate the new car price structures, second-hand car dealers would similarly be subjected to another round of price reductions.
With the fuel price hike, buyers were also increasingly scouting for smaller cars to cut down on fuel costs.
"This is yet another blow to used-car dealers," he said.
Car dealer Melvin Wong said sales of second-hand cars had already been dropping since January due to poor demand, and most dealers were unable to clear their stocks.
"We have stopped taking new orders. Our priority now is to cut prices and reduce stocks fast," he said.
"When the price of new cars drops five per cent, the price of old cars will drop more than twice that. That’s how the market forces work.
"If we do not slash prices to clear our stocks now, we will lose significantly later."
Another dealer, Lim Chin Hock, said he was bracing for the worst as he had a huge stock of cars bought at higher prices.
"The price reductions have caught all of us by surprise," he said.
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