In the car business, the real investing comes after the selling

Singapore

OF all the things that happen inside a car workshop, gourmet meals are probably the last thing you might imagine. But hosting welcome dinners for new customers inside a spotless Porsche workshop is one way Eurokars Group is thinking of putting its new aftersales building to use.

At 438,000 square feet in size, the Eurokars Aftersales Centre has room to spare, after all, and the floors look clean enough to eat off.

The S$70 million facility at 27A Tanjong Penjuru is officially opening on Oct 26, after nearly two years of construction, but it has been buzzing with activity since September. Inside, cars from the five brands that Eurokars handles - Rolls-Royce, Porsche, Mini, Mazda and McLaren - are either being prepared for delivery or repaired after they've been dinged, if they're not there for routine servicing.

Looked at in isolation, the enormous building is a monument to Eurokars' success at retailing cars. Except for McLaren and Rolls-Royce, whose sales have never fully recovered from a salty tax hike in 2013, its brands are selling at or near record volumes.

In Singapore, there are more than 32,000 Mazdas on the road and nearly 6,000 Porsches. Compared to a decade ago, the Mini population has more than doubled to over 3,000. All of those cars needed somewhere to go to be looked after.

Motor industry tycoon Karsono Kwee, the executive chairman of Eurokars, has never been hesitant about investing in buildings for his sprawling car business. Eurokars owns nearly all of its showroom premises on the Leng Kee motor belt.

Mr Kwee is spending another S$60 million to build a new corporate headquarters on a 40,000 sq ft site in the area. He plans to move the Rolls-Royce showroom there so the present Rolls-Royce, Mini and Porsche buildings on 27 and 29 Leng Kee Road can be re-jigged to build standalone homes for the two latter brands.

Yet, all that heavy investment merely underscores how capital-intensive the car business in Singapore has become.

A little over a year after moving into its own new corporate HQ and aftersales centre, Inchcape-owned Borneo Motors is already expanding the body repair facilities within the S$55 million building.

Wearnes Automotive is constructing an eight-storey extension to its showrooms at 45 Leng Kee Road that will take the building's gross floor area to more than 300,000 sq ft. Within that space, the aftersales area will be eight times the size of the showrooms.

The Business Times understands that the workshop area of the Mercedes-Benz Centre on Alexandra Road will also be expanded soon.

In essence, being successful at selling cars involves being handy at taking care of them, too.

Before the Eurokars Aftersales Centre was commissioned, the waiting time for a servicing appointment at Mazda was seven days (see amendment note). It has been eliminated altogether, and many customers now hang around at the new service centre while their cars are serviced on the spot. Some 10 per cent of them turn up without an appointment at all.

Customers are not the only ones who demand satisfaction.

The new Porsche workshop, for instance, was built with an element of future-proofing in mind. It is the first facility in Asia-Pacific to be certified for work on Porsche's growing range of hybrid cars and its upcoming electric ones. One example of the level of detail that car factories demand can be found in how Porsche requested (and got) a standalone building located five metres from all other structures, to be used as a safe place to store lithium-ion battery packs.

In such an environment, it's unlikely that small, single-brand retailers will be able to match the service levels that both customers and car companies now look for. The car business has largely become a multi-franchise one, with large corporations (many of them listed) taking on a number of brands at once. That gives them a chance to build the volumes needed to justify the capital investment that the industry demands.

What the Eurokars Aftersales Centre could portend is that the proliferation of the mega car retailer could soon be followed by the rise of the mega servicing facility. Singaporeans often complain about the high prices of cars here, but being a car dealer can be scarily expensive, too.

Amendment note: An earlier version of this article said that the waiting time for a servicing appointment at Mazda was three weeks. The waiting time was in fact seven days. The article above has been updated to reflect this.