Wheels of change turning in Singapore's motor industry

Car manufacturers are looking at ways to fuel sales, increase profit margins and have closer engagement with consumers in an overhaul of the vehicle retail business. And dealers are not entirely thrilled.

Direct sales model unlikely to translate to lower car prices here

A direct sales model could lead to hotter competition for COEs, which can only mean higher premiums. ST PHOTO: LIM YAOHUI

Like in several other markets, car buyers in Singapore will soon be able to buy vehicles directly from the manufacturer.

Car makers like Mercedes-Benz, Porsche and Hyundai are dipping their toes into the direct-to-consumer sales model - something which Tesla had adopted from day one. Clearly, the primary motivation is improving profit margin by removing or paring down the role of the middleman. And they are likely to achieve their objective.

But will car buyers enjoy lower prices because they can buy directly from the manufacturer? The answer to that is less clear.

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Two dealers in Singapore to serve BMW customers from Oct 1

BMW Asia said the move is to manage a growing demand for cars in the premium segment. PHOTO: ST FILE

From Oct 1, BMW buyers will have two official dealerships to go to if they want to buy a new car or send their existing model for servicing or repairs.

Eurokars Auto, part of motor trade tycoon Karsono Kwee's multi-brand Eurokars Group, has been appointed a full-fledged dealer - alongside incumbent Performance Motors, a division of Malaysian conglomerate Sime Darby.

Confirming a report by The Straits Times on May 13, BMW Asia said this week that the move is to manage a growing demand for cars in the premium segment.

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Mercedes-Benz may be poised to sell cars directly to customers in S'pore

The direct-to-consumer sales model allows car manufactures to have better control of variables such as pricing. ST PHOTO: LIM YAOHUI

It is a direct-to-consumer sales model already rolled out elsewhere by Mercedes-Benz, but the German car manufacturer is keeping mum for now over whether it will do the same in Singapore.

The agency model, which operates online, allows car manufactures to have better control of variables such as pricing, customer service and profit margins.

It relegates traditional car dealers to agents tasked with offering customers test drives, delivery of vehicles and after-sales operations such as servicing and repairs.

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Porsche expected to start retail venture in Singapore

Porsche has been developing its e-commerce sales channels globally and is expected to play an important role for Singapore. PHOTO: ST FILE

German carmaker Porsche is moving into retail business in Singapore in a bid to improve the experience of buying and owning its cars.

The Straits Times understands that the company is in talks with its exclusive authorised dealer in Singapore, Eurokars Group, to form a joint venture company to perform sales and after-sales functions.

Talk about the change in business arrangement had been circulating for more than six months, but neither parties were willing to comment.

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Hyundai prepares to sell its made-in-Singapore electric vehicles directly to consumers

The Hyundai Motor Group Innovation Center under construction, pictured on May 18, 2022. ST PHOTO: ALPHONSUS CHERN

Korean carmaker Hyundai is working towards selling and leasing electric cars being made at its manufacturing centre in Singapore directly to customers, The Straits Times has learnt.

The brand's subsidiary here, Hyundai Motor Group Innovation Center in Singapore (HMGICS), has put up job listings for positions that it is looking to fill on its corporate website and professional network platform LinkedIn. Among them is a sales planner, whose duties include setting up procedures for the bidding of the certificates of entitlement (COEs), vehicle registration and delivery.

These are tasks that are specific to retail operations and are traditionally undertaken by the distributor and not the manufacturer. Hyundai's sole distributor in Singapore is Komoco Motors, which it has engaged since 1986.

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