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Eurokars continues infrastructure expansion, eyes listing
MOTOR magnate Karsono Kwee is on a building spree and - he has finally confirmed - is on course for an eventual listing of his Eurokars Group.
Fresh from completing the S$15 million redevelopment of the group's Jakarta headquarters, he is embarking on a S$100 million development of his headquarters in Singapore's prime motor belt, just one street away from his existing main showroom along Leng Kee Road.
This will be followed by the completion later this year of a new S$60 million workshop and warehouse facility in Tanjong Penjuru.
So why the rapid expansion in infrastructure?
Mr Kwee said that the construction activities are borne out of necessity.
The Indonesia headquarters, on 4,088 square metres of land in southern Jakarta's automotive belt, is a redeveloped six-storey building housing the biggest Porsche showroom in Asia outside China, as well as the head office of Mazda.
Eurokars is the importer of Mazdas in Indonesia. It is also the importer of Rolls-Royce, whose showroom is also in this facility, which sits just opposite the sprawling Gandaria City Mall and Sheraton hotel.
"The main objective is to consolidate all of Eurokars Group's core functions in Indonesia," he said. "The new headquarters will also accommodate the long-term growth plans of these brands."
Eurokars is also the Indonesian importer for BMW, which remains in a separate facility in Jakarta, and a Maserati dealer.
As for the Tanjong Penjuru facility, it will replace Eurokars' Sungei Kadut property, the lease on which runs out in about four years.
Sungei Kadut is now used by Eurokars as its corporate HQ. The premises also houses a showroom, workshop, body shop, bonded warehouse and facilities for pre-delivery inspection (PDI).
The operation also supports cars bound for the Indonesian market, as these are first shipped to Singapore and then re-exported.
Because of this, Mr Kwee said the construction of the Tanjong Penjuru facility, despite its high cost, is "definitely" worth it.
"With Mazda in our portfolio and the brand's strong growth, we need our own premises for our backend operations like parts and car storage and PDI," he added, explaining that Eurokars is currently using a logistics company to perform these functions at a cost of up to S$400,000 a month.
Eurokars Group's corporate offices in Sungei Kadut will move to the new downtown HQ when construction is completed by 2020. This new building will come up on a 40,000 sq ft site between Kung Chong and Chang Charn roads. The property was bought in late 2011 for over S$20 million.
This new facility will also house the Rolls-Royce showroom and aftersales, which will move from its current location at 29 Leng Kee Road, as well as McLaren.
"We are planning for the future because Porsche needs more space (at 29 Leng Kee Road) and so does Rolls-Royce," said Mr Kwee.
The heavy investments have not gone unnoticed in the market, and there has been regular speculation that the Eurokars Group is eyeing a listing.
Mr Kwee has not clearly indicated if it is or not - until now.
"I am planning it in the future," he said, but declined to give a time- frame.
Eurokars is the largest privately owned car distributor in Singapore with five marques here - Porsche, Rolls-Royce Motor Cars, Mini, Mazda and McLaren.
Komoco Motors is the next biggest, with its Ferrari, Maserati, Hyundai, Chrysler Jeep and Harley Davidson franchises.
The director of a luxury dealership considers the Eurokars Group a "valuable" company for its mix of high-end and volume brands. "Based on 10 times earnings, it could be worth up to S$500 million," he said.