Successful Singaporeans Abroad

Kheng Keng Auto drives deep into new territory

Mr Cher Kwang Siong saw an opportunity to ship cars directly to Africa after realising that many of his cars from Singapore were exported to Dubai before being resold to the Kenyan market. His firm is one of the pioneering Singapore companies in Afri
Mr Cher Kwang Siong saw an opportunity to ship cars directly to Africa after realising that many of his cars from Singapore were exported to Dubai before being resold to the Kenyan market. His firm is one of the pioneering Singapore companies in Africa.PHOTO: DIOS VINCOY JR FOR THE STRAITS TIMES

Cher Kwang Siong's company has a presence in regions like Africa, S-E Asia and S. America

Mr Cher Kwang Siong has always had a strong interest in cars and started helping out in the family automotive business as a schoolboy.

But he is quick to warn that it takes much more than passion to run a successful company.

"This is my hobby, but understanding the business and persevering are more important," says the managing director of Kheng Keng Auto, which has made its name as one of the pioneering Singapore companies in Africa.

Mr Cher, 48, started helping out at his father's car repair workshop - a five-man operation in Yio Chu Kang - when he was a teenager in the 1980s.

The firm has since grown into a one-stop automotive service provider with about 100 employees worldwide. Its operations include the import and export of cars, car scrapping services and workshop repairs for vehicles.

DIFFICULT TO PERSUADE LOCALS

Getting Singaporeans to work overseas is not easy, because in Singapore it's very safe and sometimes they are not able to adapt to new environments.

MR CHER KWANG SIONG

Kheng Keng Auto has a presence in more than 50 countries in regions such as Africa, South-east Asia and South America.

EARLY VENTURES ABROAD

In its early years, the company saw strong demand from dealers in South-east Asia for Singapore cars and spare parts.

  • NAME: Cher Kwang Siong

  • AGE: 48

  • JOB: Managing director of Kheng Keng Auto

  • BASED IN: Singapore, but travels frequently to the company’s locations around the world

"Cars in Singapore are scrapped after a relatively short period compared with other countries in the region, because cars are usually de-registered after 10 years here," said Mr Cher, who joined the family business full-time after finishing national service.

"I realised that not only South-east Asia, but also the whole world, had a strong demand for such cars."

The company opened its first overseas branch in Malaysia in the mid-1990s, began exporting cars to the Middle East, and also started sourcing for cars and car parts from Japan to meet growing demand.

  • Kheng Keng Auto managing director Cher Kwang Siong offers tips for striking out in a new market:

  • 1 Establish a strong brand name: “Some customers import cars through other companies but they come to us for parts, and we help them even though they didn’t buy the car from us,” he said.
    “I do this to differentiate myself from others... to show that we’re the right ones to buy from.”
    Having a strong brand name also means that customers would be willing to pay a premium, knowing that they will receive better service, he added.

    2 Build up a pool of talented, adventurous staff: The company sends staff from Africa to its Singapore headquarters for training.
    “We want to show them how the business is run and how to keep cars in showroom condition, in line with the standards we have here,” Mr Cher said.
    The company also wants to hire “adventurous” staff willing to work overseas and help the company establish itself in new markets.
    Coming up with new ways to motivate staff based overseas is also vital, Mr Cher noted.
    “The market is not as competitive as in Asia or Europe. If you monitor and maintain your business well, it will just run by itself and you’ll still make money.
    “We have to make sure staff are constantly pushed to do better... We might give them a share of the profits, or another branch to manage,” he said.

    3 Be prepared to take risks and make mistakes:
    In an unfamiliar market, the right business decision to make is not always clear, Mr Cher said.
    “When you go overseas, there is no guide telling you whether you should turn left or right...You have to decide what direction you want to take, and you need plan A, B and even C. A lot of things will not go the way you thought they would... Sometimes you have to give up and use another plan.”

The idea to start shipping cars directly to Africa came after Mr Cher realised many of his cars from Singapore were exported to Dubai before being resold to the Kenyan market.

He flew there in 2004 to explore the market, decided that opportunities were good, and set up a branch in Nairobi, Kenya, the same year.

Africa lacks public transport infrastructure, which fuels the strong demand for cars, Mr Cher noted. "Once economies grow and incomes rise, people's first thought is to buy a car for convenience. It's not a luxury item, but for transport."

The company also saw growth prospects in southern Africa where incomes were rising fast, and established a branch in Johannesburg, South Africa, in 2006 to cater to countries in the region such as Zimbabwe, Zambia and Namibia.

AN UNFAMILIAR MARKET

Kheng Keng Auto was the first Singaporean firm to open a car showroom in Kenya, Mr Cher said.

"At first, it was not easy. The method of running the business is totally different from Singapore, or the rest of Asia," he said.

To build brand awareness, the company drove fleets of eight to 10 cars to small towns, sometimes

travelling as far as 300km away from the city.

"We might sell eight out of the 10 cars while there. Or we might sell three cars. But these roadshows raised awareness about our company among the locals.

"For example, in the weeks after the roadshow they might take a bus to our showroom to buy our cars," he said.

Customers could browse through the company's offerings on an online catalogue at Kheng Keng's branch in Nairobi.

However, this posed its own set of problems back in 2004.

"In the office, we set up computers so that customers could see pictures of the cars.

"But in 2004, the (dial-up Internet) connection was so slow that loading a photo could take 15 minutes, and we had only about eight computers, so there would be a long queue," Mr Cher recalled.

Technology has improved since, but the firm still believes in helping customers every step of the way - from selecting a car and getting it into the country, to longer-term maintenance and spare parts.

"To be successful, we have to help them so they feel better about buying cars from Kheng Keng," he said.

In recent years, the company has also been affected by currency volatility. African currencies began weakening substantially against the greenback in 2011, which meant that Kheng Keng's cars, priced in United States dollars, became increasingly expensive for locals.

"It was initially difficult for customers to accept that the same car could become more expensive within a few months...

"But customers have come to realise that their currency fluctuates. This is a challenge of working in this region," he said.

FUTURE PLANS

Kheng Keng has beefed up its supply chain to meet growing demand from all over the world.

The company started sourcing for cars and car parts from Britain last December and is looking to expand sourcing in Europe, Mr Cher said. This will complement its supplies from Japan and Singapore.

It also shifted its central logistics node from Singapore to Port Klang in Malaysia in August 2012, to handle larger volumes. Sourced products are processed through this location before being shipped to customers or branches overseas.

"Our business needs a big space and a lot of manpower, both of which are lacking in Singapore," he noted.

The company also started another downstream sales channel in Sharjah, part of the United Arab Emirates, in March this year.

This channel shortened shipping times to North Africa, and also gave the firm more access to the Middle East market.

The company is now focused on growing its business so it can hire more talented staff, Mr Cher said.

"Even if there are opportunities, we might not be able to take advantage of them because we don't have enough staff, or enough people willing to travel.

"Getting Singaporeans to work overseas is not easy, because in Singapore it's very safe and sometimes they are not able to adapt to new environments."

It will be a while before Mr Cher, who has two sons aged 16 and four, thinks about handing the business to the next generation as his children are still young.

However, the company is already training its second and third generation of leaders.

Said Mr Cher: "I think the best age to run this business is from the late 30s onwards... You need at least five to eight years to accumulate enough experience."

A version of this article appeared in the print edition of The Straits Times on August 22, 2015, with the headline 'Kheng Keng Auto drives deep into new territory'. Print Edition | Subscribe