According to the President of the Malaysian Automotive Association (MAA), sales of used vehicles saw significant growth during the first 6 months of this year. While sales of all vehicles, new and used, were suspended for some months due to the Movement Control Order (MCO) and closure of businesses, when sales activity resumed, many people headed for used car lots to look for lower-priced vehicles.
The reason for this new buying pattern is believed to be concern about using public transport which has risks of COVID-19 infection due to the crowded environment. As such, many people would rather have their own transport and are buying a used car which would be more affordable than a new one.
While Proton’s main business is making and selling new vehicles, it also realises that the used car business represents a critical component of the automotive value chain. Therefore, as part of its overall strategy, it started to develop a Used Car Management (UCM) department so as to streamline the sales and distribution of used cars in support of new car sales.
Pilot project began at 8 outlets
The UCM division began operations in 2019 with a pilot project consisting of 8 outlets located in various dealerships. The initial period was used to establish operating procedures and to train used car inspectors who would manage transactions in each outlet. In 2020, the goal is to have operations established at 36 3S/4S outlets nationwide.
“With Proton’s sales growing quickly and expected to increase over the coming years, the role of used car management has become more important as we assist customers who need to dispose of their used vehicles. When we started the UCM division in 2019, the goals set were to support new car sales and to improve the resale value of Proton cars,” explained Brian Cheah, Head of Used Car Management.
The target set for UCM is for replacement sales, where a current owner trades in a Proton model for a new one, to account for a minimum of 10% of the volume for outlets with UCM operations. The company has also established programmes to help achieve the target such as Proton Xchange, designed to encourage current owners to replace their current cars with the latest Proton model.
Proton Certified Pre-Owned
With regard to the sale of trade-ins, cars sold by UCM will be marketed under the Proton Certified Pre-Owned (PCPO) banner. All PCPO vehicles undergo a comprehensive 201-point inspection and are guaranteed to have never suffered any flood or major structural damage due to accidents. They also get a 1-year extended warranty covering the engine and transmission and are eligible for a one-time free service (engine oil and oil filter only) up to 6 months after their registration date.
“In the future, UCM will set up a dedicated Proton used car portal with an online selling platform to attract tech- savvy used car buyers. Potential customers will be able to view our stock remotely and they can also browse the website to get estimated valuations for their current cars,” said Mr. Cheah.
UCM outlets get more sales
Despite being relatively new to the market, the UCM outlets have already had a positive impact. “We started the UCM program in October 2019 and it has helped our Sales Advisors to close deals as we can now offer competitive trade-in value for used Proton cars,” said Ryan Lai, MD of LHM One Stop Car Service Centre, a PROTON 4S dealership in Nilai, Negeri Sembilan.
Judith Yam, MD of Atiara Johan, a 4S outlet in Puchong, Selangor, revealed that the dealership has recorded over 130 trade-in transactions. “Since it was established, UCM boosted our sales by offering special incentives for customers who are current Proton owners. they see as a value-added service that allows them to easily purchase a new Proton,” she explained.
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