Many consumers are choosing to buy used cars not just because they are cheaper, but because 3- to 7-year-old vehicles are still in relatively good condition, say used car dealers. The trend has led to growth in the country’s used car market.

Johnny Widodo, the CEO of BeliMobilGue.co.id, a consumer-to-business (C2B) online marketplace for used cars aptly named “buy my car”, said sales of secondhand cars increased significantly almost every year.

Annual used car sales was usually triple that of new car sales, which was about 1 million cars a year, said Johnny. “Monthly sales of used cars can reach 300,000 cars, which is quite high,” he added.

Data from the Association of Indonesian Automotive Manufacturers (Gaikindo) shows that retail sales of new cars in the domestic market had dropped 11 percent in the first half of the year to 499,573 cars.

Meanwhile, retail sales of new cars in May to June had dropped 30 percent year-on-year to 65,657 vehicles.

Johnny said that opportunities in the secondhand car market were promising, because the sector had no dominant players.

“Indonesia’s used car market is extremely fragmented. Many dealers run their business individually,” he said.

Another company that sees gold in the used car market is Carsome Indonesia, the local branch of a Malaysian C2B start-up that expects significant returns from the Indonesian market.

“We have a sales target of about 15,000 cars this year,” Carsome Indonesia managing partner Andreas Djingga told The Jakarta Post on Wednesday.

With the Jakarta administration expanding the odd-even traffic policy next month and planning to limit vehicle age to a maximum 10 years by 2025, used car businesses believe their sales will be driven further.

“Many people sell their cars after [driving them] three to seven years,” said Johnny. After the vehicle age regulation, he expected more people would sell their cars sooner. “Used car sales could grow between 10 and 30 percent a year by 2023,” he added.

Statistics Indonesia (BPS) records show that an estimated 16 million cars were on roads across the country in 2017.

Johnny said that the expanded odd-even policy in Jakarta could boost used car sales further, as their relative affordability would enable consumers to own more than one car in response to the regulation. “[The policy] is good for business,” he said.

Andreas echoed Johnny, saying that “the odd-even policy expansion might boost business”. He added that long holiday seasons like Idul Fitri and Ramadan also played an important role in driving sales.

Meanwhile, Gaikindo has yet to comment on whether the change in policy would impact new car sales. “We’ll see how [the plan] goes,” Gaikindo cochair Jongkie D. Sugiarto told the Post on Tuesday.

Johnny noted that car types were vital to sales figures, and that both new and used car markets were currently dominated by multipurpose vehicles (MPVs).

Gaikindo data supports this: Eleven out of the 15 top models in the first half of 2018 were MPVs, with flagship brands like the Toyota Avanza, Mitsubishi Xpander and Daihatsu Xenia numbering among them.

Andreas said that MPVs were also a favorite among consumers at Carsome Indonesia, as were city cars and sport utility vehicles (SUVs).

Dealers play a very important role on used car C2B platforms like BeliMobilGue.co.id and Carsome Indonesia.

Johnny, previously a director at a fintech company, said BeliMobilGue.co.id had partnered with around 1,000 used car dealers in Jakarta, Surabaya, Denpasar and Yogyakarta, and had served around 10,000 consumers.

Similarly, Carsome Indonesia has opened branches in Surabaya and Bandung to strengthen its position in the domestic market as part of its Southeast Asia business. (asp)

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