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How will car dealers survive in car-lite S'pore?

The motor trade has to grapple with fresh challenges, but Inchcape Singapore's managing director - less than eight months into her role - wants to bring fresh thinking to the industry.

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Inchcape's most recent launch was for the Lexus LS, the luxury marque's flagship model. Ms Wong is 'happy' with the car's sales. If you order one of these today, you will take delivery of it only in the second half of the year.

Singapore

IF you want to meet Jasmmine Wong, try hanging out where people go to shop for a new Lexus.

"I like to spend my weekend coming to the showroom, just to stand down there and look at the consumers," says the managing director of Inchcape Singapore.

It is a position she has held for fewer than eight months, which makes her something of a newcomer (or, to a tribalistic mind, an outsider) to the motor trade.

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Inchcape holds the Lexus, Suzuki and Toyota franchises in Singapore, along with that for Hino trucks. The business is a subsidiary of Inchcape Plc, the world's largest independent motor vehicle distributor and retailer. The UK-listed company reported full-year revenues of £7.8 billion (S$14.3 billion) in 2016, and handles 34 brands in 29 markets.

Ms Wong took the helm at Inchcape here after a dozen years in the fast-moving consumer goods (FMCG) industry; her last job was as the business executive officer for Nestle Professional, in charge of Singapore, Malaysia and Brunei.

While she is new to the motor trade, she already sounds like an old hand at the business, readily debating the implications of the latest emissions regulations from the Land Transport Authority, and making friendly bets with motoring journalists about the industry's favourite topic: Certificate Of Entitlement (COE) prices.

Of Inchcape's most recent launch of the Lexus LS, the luxury marque's flagship model, she says she is "happy" with the car's sales.

(It is sold out, she says, and customers who book one today will have to wait until the second half of the year to take delivery of it.)

In Inchcape's most recent quarterly earnings report, group chief executive Stefan Bomhard singled out her division for praise. "Singapore, in particular, was a good performer," he said in a statement.

But while things seem to have gotten off to a flying start for Ms Wong, in some ways the car industry itself seems to be running low on fuel. The Land Transport Authority has cut growth in the vehicle population to zero, and is actively looking at ways to turn the nation into a "car-lite" society.

Further afield, the car industry has been grappling with tightening emissions regulations and the possible rise of self-driving vehicles that would obviate the need for private car ownership.

Where some see gloom, however, Ms Wong sees opportunity. "My view is that car-lite doesn't mean zero cars," she says.

There is a future for car dealers like Inchcape in Singapore, she says - but only if they adapt. "We cannot be just selling cars. We need to concentrate on selling services, as well. There's a lot we can sell along the way that in the past, people may not have looked into."

In the mid-term future she is plotting for Inchcape, the business will develop other revenue streams that could someday replace the cash generated from car retail.

Some of her ideas are tried-and-tested ones. "We have not really ventured very aggressively into used cars," she says. "That's low-hanging fruit."

In the new-car business, a large number of high-quality used cars are traded in by customers. She says that sprucing them up for resale would give Inchcape a way to make money twice from the same customer.

The aftersales (meaning workshop and accessories) business is also another way for dealers to keep the revenue taps flowing.

"Even when we go car-lite in the future, there will still be the legacy of all the existing cars, and as they get older, they need support," she says.

More radical, at least by Singapore motor industry standards, is her plan for Inchcape to provide aftersales support for parallel-imported cars. Authorised distributors typically want nothing to do with such cars, but she sees doing this as an opportunity to woo new customers, especially when her brands' cars are involved in a mechanical recall.

"Whenever there's a recall, as authorised dealers, we look after the interests of our customer. We make sure that we are rigorous - that we call to remind customers to send their cars in (to the workshop)."

But parallel importers often lack the scale or focus to follow up on recalls, and that creates the chance for Inchcape to touch base with their customers and, potentially, win them over.

Inchcape's own customers will probably pay less for workshop services than those who drive parallel imported cars, in order to maintain the company's goodwill with them, she says, but there are tens of thousands of parallel-imported Toyotas whose owners she wants in her database. "What I want to do is reach out to these customers and bring them into my pool, and also try to motivate them to sign up for my (aftersales) programmes," she says.

That said, she readily admits that the car industry faces an "abstract journey" in the longer term.

To make things more concrete, she has commissioned numerous consumer surveys to try and get under the skin of car buyers; she wants to focus on understanding them - which in itself is unusual in an industry that tends to focus on understanding the products more than the people who drive them.

It is for this reason that she spends weekends in the showroom, watching customers. "I like to see who is buying, who made the decision," she says. "When they look at the car, do they open the door first or do they walk around it? What is the thing that triggers their decision-making?"

Ms Wong says the practice is something she imported from the FMCG industry, where retailers place cameras in stores to watch consumers' every move.

But as much as she spends weekends watching car buyers, it is clear that on weekdays, her eyes are carefully trained on the bumpy road ahead for the car industry.

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