SINGAPORE – Around half of the 3,857 Toyota passenger cars sold by Borneo Motors in 2023 in Singapore were bought by businesses, but the authorised distributor of Japan’s No. 1 car brand will be pushing to get more private buyers to tip the balance, according to its head honcho.

Borneo Motors’ Toyota was the Republic’s top seller in 2023, taking the No. 1 spot occupied by Mercedes-Benz in 2022. Borneo Motors’ figure includes Lexus, which is Toyota’s luxury brand.

Mr Ng Khee Siong, the managing director of Inchcape Singapore, Borneo Motors’ parent company, wants the dealer to stay in the No. 1 spot, through more Toyota and Lexus models and boosting the sales and aftersales functions to win over customers.

This is while parallel importers have a significant chunk of the Toyota pie, accounting for 46.8 per cent of total Toyota car registrations in 2023. This was higher than the 21.2 per cent market share that parallel imports have of the overall car market.

Borneo Motors, representing Toyota and Lexus, is part of Inchcape Singapore, which also owns Champion Motors, the distributor for Suzuki cars. Combined, the dealerships registered 4,115 cars in 2023, making Inchcape Singapore the second-biggest motor dealer group after Jardine Cycle & Carriage with 5,357 registrations from six brands.

Besides Singapore, Inchcape operates in over 40 countries with more than 40 automotive brands.

Industry observers said that private car buyers have been keeping away as certificate of entitlement (COE) premiums surged in 2022 and 2023, with the low supply of COEs.

New private car registrations were down by 5 per cent to 18,204 in 2023 from 19,168 in 2022, but rental car registrations in 2023 were 4.2 per cent higher than 2022 with 9,163 units from 8,790.

Rental cars tend to be bought by companies. They can be hired out to individuals to use privately or to provide ride-hail services.

The motor industry expects more COEs to be available from 2024, peaking around 2026 as more vehicles will be deregistered when their COEs expire.

During an interview held at the Toyota showroom in Leng Kee Road in late March, Mr Ng said that as the expected increase in COE supply leads to the premiums falling, private buyers will be keen to buy cars again.

He believes that the recovery will likely outpace corporate buyers’ appetite to refresh their fleet, which would have been bought at high prices in the recent past. He said that Inchcape has to make sure that it can catch this wave to maintain its leadership position in Singapore.

Prior to his appointment as the head honcho in Singapore, Mr Ng was the aftersales director for Inchcape’s business in Singapore and Greater China. The aftersales experience is an important part in the company’s strategy to get owners to buy their next Toyota from Borneo Motors – even if their existing one is a parallel import.

Sales operations are also being beefed up. The Toyota showroom in Leng Kee Road was revamped in August 2023 along with the launch of an online platform, and there are plans to refresh the Lexus showroom.

Mr Ng considers parallel-imported Toyota cars as an opportunity for his business, because the owners would already be “fans of the brand”.

Parallel-imported cars are encouraged to be registered with Borneo Motors to be promptly attended to if there are safety-related recalls. The dealer also lays out the welcome carpet for these cars to be repaired and serviced at Borneo Motors’ workshop.

Besides being a revenue source for the company, Mr Ng also wants to use the experience to wow the owners, priming them to get their next Toyota from Borneo Motors, instead of parallel importers.

Toyotas bought from Borneo Motors can have their warranty period extended to seven years – two more than what is offered by brands like Hyundai, Honda and Kia – to cover the major components.

On top of demonstrating Borneo Motors’ confidence in the quality and longevity of Toyota cars, the lengthy warranty is another way for the company to stay in touch with its customers.

While extended warranties tend to be underwritten by insurance companies, Borneo Motors is bearing the costs because Mr Ng said it has sufficient data to know the risks involved.

He added that over 70 per cent of Toyota cars up to five years old continue to be maintained by the company. This is higher than the industry norm.

Mr Ler Hwee Tiong, a motor industry veteran now representing Point S, a global network of automotive maintenance and tyre workshops, said at least 50 per cent of owners will leave the authorised distributor’s workshop by the fifth year.

The cost of a standard maintenance service at Borneo Motors is said to be around 6 per cent more than a comparable workshop.

But Mr Ng said it is “not about price but really about the value” as he acknowledged that a big set-up like Borneo Motors will not be able to compete on price against smaller outfits with lower overheads.

To find operational efficiencies, which include reducing manpower needs, and up its sustainability credentials, Borneo Motors has installed five automated car washes across its service locations: three in Leng Kee, near Queenstown, and two in Ubi, which is near Eunos.

Said to be an “approximately seven-figure” investment, these machines from German brand Karcher cut water use by up to 7.5 million litres annually, the equivalent of three Olympic-sized swimming pools, compared with washing by hand.

Capable of handling cars and vans of different shapes and sizes, the machines use sensors to precisely move the brushes and blowers to be just close enough to the vehicle to give a thorough clean but not cause damage. The water from the wash is captured, filtered and recycled.

A cleaner will give the washed car a final check before it is ready to be returned to the owner.

Each machine can wash around 60 vehicles a day. Without automation, a car requires two cleaners and 14 minutes in man-hours. A spokeswoman for Inchcape said that manpower efficiency has been raised by 67 per cent, adding that the people can now be deployed to do other tasks.

Mr Ng said Inchcape’s product portfolio is set to be energised. The new Suzuki Swift, which is a key model for the Japanese brand, will arrive in the second half of 2024. Suzuki’s first electric vehicle will be introduced in 2025.

Mr Ng did not give details on the model introductions planned for Lexus, but said that the strategy is to broaden the reach of the luxury brand instead of relying on one or two volume drivers.

Discussion is said to be “ongoing” for Borneo Motors to bring in the Toyota Proace. The electric version of this European-made van has been available here only through parallel importers so far.

If this happens, Inchcape will not only have a model to complement the Hiace, which is available as a van and minibus, but also be able to offer its aftersales services to the population of parallel-imported vans and win their owners over to buy their next Toyota from Borneo Motors.