IN Singapore’s tightly regulated and heavily taxed car market, distributors have to turn to increasingly more creative ways to secure customers.
It’s no longer about an attractive price with a discount, since cars are always going to be hugely expensive propositions. But layering on value-added services to this huge expense helps to ameliorate the pain. And it also builds relationships with customers.
Eurokars Group, under the guidance of founder Karsono Kwee, has built its stable and reputation as the largest privately-owned car distributorship in Singapore, with brands like Rolls-Royce, McLaren, BMW, MINI, Mazda, MG and Pagani under its wing. Its regional reach spreads to Indonesia, China and Australia.
Eurokars’ leasing arm has also been strategically growing, embracing old and new customers with a service that helps take away the headaches car owners would otherwise face, from maintenance to insurance, Touch ’n’ Go card and roadside assistance, and more.
Embracing Change
The next-generation leadership has helped the brand evolve with the times. Charmain Kwee, Group Executive Director of Eurokars Group, has been handed the reins of the leasing business and has strategically addressed the needs of a younger generation preferring an asset-light lifestyle.
Instead of paying hefty down payments and dealing with recurring running costs, they would rather have a smaller outlay that allows their mobility needs to be met while leaving them with cash to indulge in other desires.
At the Rental Experience Lounge, at 27A Tanjong Penjuru, Charmain announced the new car rental and leasing platform that would tick the virtual boxes of preferences like sustainability, immediacy and convenience, the younger consumers desire.
Leasing In Uncertain Times
Dylon Lim, Senior Manager, Rental & Leasing at Eurokars Leasing, obseves an increase in the acceptance of car leasing.
He says his fleet has grown by 30%, as a result of an increase in short-term rentals. Most of the leasing customers take the car for one to three years.
But why lease, when you could have your own car, at least for the duration of your Certificate of Entitlement (COE)?
“It’s the consumer’s priority. Some clients are looking at end-to-end service for their vehicle, without needing to worry about the general after sales of the vehicle such as insurance and road tax. Leasing will be a good way for them to have someone take care of such whilst they focus on what matters more,” Dylon explains.
Further, in a dynamic world where you could find yourself relocating to another country for work, leasing makes more sense.
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“Leasing will help to bridge the gaps between the ownership since they will only need to set aside a comfortable budget for the term of lease,” Dylon says.
There is also the trend of the younger generation moving to be more asset light. “You will notice that instead of owning, they will usually subscribe to things instead (e.g. Netflix, Spotify, etc.).”
Greater convenience could be behind this change in behaviour.
Dealing With Volatility
Another issue to sidestep would be dealing with COE volatility and the depreciation of the car. “With COE prices fluctuating, leasing a vehicle will basically mean that you have better control of the budget since there will be no disposal risk.”
Then, there is the opportunity cost of that hefty down payment.
“If you have to commit 30% to 40% downpayment with such high COE prices, you will be locking up quite a bit of your funds which can be put to better use.”
Dylon admits that in the long term, leasing is a more expensive proposition. But for those who like to keep up-to-date with new models, it allows for a more comfortable way of having the latest model in the driveway.
“In the first three years of owning a car, you will take a hit on depreciation the most, taking into account the purchase price and potential resale value,” Dylon points out.
“But as you own the car over a longer period, you will notice that your total ownership cost over the period of time will be reduced.”
Changing times demand a change in business mindset. The road ahead is going to require nimble minds to navigate accelerating shifting preferences.
