Editor’s note: This story has been updated to with a clarification from Carsome about the industry’s collection issues.
Carsome, a used-car platform with operations across Malaysia, Singapore, Indonesia, and Thailand, could gain from the disruptions to the global automobile manufacturing industry amid the novel COVID-19 virus outbreak.
As of Tuesday, World Health Organization data showed more than 375,000 confirmed cases and more than 16,000 deaths from the pandemic. In addition to human suffering, a wide swathe of business has been hit, driving the global economy into a recession.
The S&P Global Ratings forecast in a report this week that global light vehicle sales would tumble nearly 15 per cent this year, with most global manufacturers announcing European and US production shutdowns.
Meanwhile, CGS-CIMB has cut its estimate for Malaysia’s new total industry sales volume to 590,000 for this year, from a previous forecast of 615,000 after the combined January and February figure dropped 5.9 per cent on-year.
Carsome has a 6,000-strong network of car dealers across Southeast Asia, and according to the company, more than 40,000 used cars have been transacted per year on its platform, out of the more than 4 million used car deals annually in Southeast Asia. That works out to over $300 million in transaction value, excluding car loans and financing.
In any case, Carsome is entering the slowdown with cash in hand, after raising $50 million in debt and equity in December in a Series C round the company said was oversubscribed. Investors included MUFG Innovation Partners, as well as earlier backers Gobi Partners and Convergence Ventures.
Juliet Zhu, the chief financial officer of Carsome, said the Malaysia-based startup is also working to find new ways to limit the number of people involved in each used-car transaction.
Before joining the startup, Zhu was a venture capitalist, having been a director at Fosun RZ Capital and an investment director at Jubilee Capital Management.