Life in a parallel universe

The Honda Vezel, now the best-selling parallel import, arrived a year earlier than the Honda HR-V (above) - the name of the same car assigned to Honda agent Kah Motor.
The Honda Vezel, now the best-selling parallel import, arrived a year earlier than the Honda HR-V (above) - the name of the same car assigned to Honda agent Kah Motor.ST FILE PHOTO

Considering a parallel import? You have the manufacturer's blessings

One of the first articles I wrote as a motoring journalist was a report on how Cycle & Carriage, the authorised agent for Mercedes-Benz, was losing sales to parallel importers.

It was a very long time ago, but I remember it got the folks at Cycle & Carriage really worked up. I quickly learnt that "parallel importer" was a bad word to authorised agents.

Back then, motor companies would regularly deride these relative newcomers as opportunists who sold cars which were not "tropicalised" for Singapore and for not offering aftersales support. Many roped in their principals - the car manufacturers - to say the same thing about parallel importers.

Years later, when Daimler took over the Mercedes-Benz distributorship and made Cycle & Carriage a mere dealer, I was given a glimpse of how car manufacturers actually view parallel imports.

BMW had just then overtaken Mercedes-Benz as Singapore's bestselling brand, according to figures from the Motor Traders Association - a trade body for authorised agents.

At the launch of a new Merc model, a Daimler executive came up to me and said: "You should have included parallel import numbers."

Obviously, if parallel imports were included, Mercedes would still have been the No. 1 brand.

This went against conventional practice because including parallel import numbers would lead to double-counting globally. The same cars would have been tallied as sales in their countries of origin.

Anyway, the irony was that a Daimler executive who was previously with Cycle & Carriage repeated the same line - that we should have included parallel imports in our tally.

Today, it is clear to me that car manufacturers do not really care who sells their products, even as they continue to denounce parallel imports publicly.

There is plenty of evidence to support my assertion.

Let us start with the Toyota Wish. This popular MPV was available as a parallel import for almost five years before Toyota Motor allowed authorised agent Borneo Motors to have it in 2008. You have not misread - five years.

As a result, Borneo Motors lost five years' worth of sales.

Then, take the case of the Honda Vezel, now the best-selling parallel import. It arrived a year earlier than the Honda HR-V - the name of the same car assigned to Honda agent Kah Motor.

Not only that, the Japan-made Vezel is better equipped, costs less and is slightly more environmentally friendly than the Thaiassembled HR-V.

Next, the Toyota Harrier, which has been outselling the authorised Lexus RX for nearly 10 years since 1999. Then, when Toyota Motor decided to introduce the Lexus brand to its home market, it stopped making the Harrier version of the car - but only temporarily.

Now the Harrier has returned as a compact crossover going head to head with the Toyota RAV4 and Lexus NX - two models sold by Borneo Motors.

There are many other similar examples of parallel imports that are competing with (or outcompeting) authorised agents' cars. They include the Honda Fit (Jazz), Toyota Estima (Previa) and Toyota Vellfire (recently made available to Borneo Motors).

Today, the iconic Mazda MX-5 1.5 is available from parallel importers. Authorised agent Trans Eurokars Mazda has not yet launched the model. And when it does, it will start with the 2-litre version.

It will get the 1.5-litre variant only next year, at the earliest.

So, why are these things happening when car manufacturers are supposed to be supporting their chosen representatives?

The answer is simple - manufacturers do not really care. A car sold is a car sold. It does not matter who sold it.

A version of this article appeared in the print edition of The Straits Times on September 05, 2015, with the headline 'Life in a parallel universe'. Print Edition | Subscribe