For every 1 new car sold annually in USA, 10 used cars are sold. In Germany, this ratio is roughly 6x, and Mexico 4.7x. Surprisingly across Southeast Asia, only 1 used car is sold for every 1 new car. Why is this the case? Is something fundamentally broken in our market? Below we attempt to answer these questions from a practitioners’ perspective, pulling together the team’s decades of collective experience in the automotive sector. 

1. Supply: Every New Car eventually becomes a Used Car

A fundamental driver of the used car market is the growth in new car sales. Other than Malaysia and Thailand (arguably the most mature automotive markets in ASEAN), the region remains severely under-penetrated in terms of vehicle ownership. The historical factors for this shortfall are typically lower per capita income and inadequate transportation infrastructure.