BANDAR SERI BEGAWAN

USED cars have steadily become a force in the domestic automobile market with some dealerships of brand-new vehicles acknowledging their growth over the past year.

An executive of NBT (B) Sdn Bhd, sole distributor of Toyota and Lexus vehicles sees the domestic automobile market becoming more competitive because of the anticipated entry of more used cars.

“As long as there are used cars in the market, there will be competition, and other distributors will also offer some sort of competition,” said Ninan Chacko, NBT managing director. “But the new player in market are the used cars.” Asked how fierce the competition would be with used cars for the upcoming year, Chacko said: “I think that they are quite strong, especially with the yen as high as it is, the used cars provide an alternative for people who want to buy cars.”

On Toyota’s projections for the upcoming year, Chacko said that the Japanese yen would still not have any effect on their Toyota vehicles due to the fact that a number of their vehicles come from the Asean region. “The impact will be the same this year as it was last year, so I don’t think that it would be different now. However, (the domestic market) is going to be more competitive because there’s a lot more used cars coming in,” he said.

Other car distributors have also factored in the performance of used car dealers and its impact on their sales. In a previous article, an industry source said that second-hand car dealers were averaging close to 100 units a month depending on the stock of cars they bring in. “The cars are reconditioned so they are able to be sold much cheaper, of course,” he said.

At the beginning of the year, sales of used cars surged mainly due to the recent increase in the prices of brand-new Japanese cars. A salesperson at a used car dealership said, “Usually we sell an average of five cars or fewer, but last month we sold about 20 cars and my boss has brought in more stock from Singapore because we see that we will continue (to see) this trend for this year.”

Their busiest months are usually before the Hari Raya season but January was “incredibly good”, she said. Another secondhand car dealer said it was possible for the car resale market in Brunei to do quite well this year because customers are able to get a better deal by availing themselves of refinancing for used cars.

With the new credit card regulation now being put into effect, whereby customers are no longer allowed to make their car loan repayments through credit cards, Chacko said that this would also have an impact on the market. “It will weed off those people who are on the borderline (in terms of repayment capabilities), so there will be an impact, but overall I think there will be an impact not only for NBT, but other distributors,” he said. “This has been so sudden that we have not been able to sit down and come up with any counter measures.”

An anonymous source from the automobile industry said that indirectly it would affect car sales as loan approvals are based entirely on customers salary and not whether or not they use cards to repay the car loans. “If they qualify, which is a repayment not more than 40 per cent of their net income, and most of them do, banks will give the approval. In terms of not being able to repay loans with credit cards, it’s the bank that will be affected. To some degree it may affect us as before they purchase a car, they might think of how repayments are not available through credit cards,” he said.

The Brunei Times

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