EUROAUTOMOBILE has been unable to achieve commercial viability of its Alfa Romeo distributorship due to prevailing market conditions, parent company EuroSports Global said in a bourse filing on Tuesday (Oct 4).
It is for this reason that the company has moved to inform Alfa Romeo's manufacturer Fiat Auto of its intention to relinquish their agreement to be the brand's importer and distributor in Singapore, it pointed out.
The announcement came hours after The Straits Times reported that Komoco Holdings is set to take over the exclusive distributorship next year. The newspaper also noted that EuroAutomobile has shut down its Alfa Romeo showroom at Leng Kee Autopoint and laid off four sales staff on Sep 30.
EuroSports, in the latest disclosure, said the group is in the midst of negotiating with Fiat Auto on a mutual termination agreement. Further announcements will be made on the effective date of the agreement's relinquishment, it added.
It also stated, while the showroom has shut down, EuroAutomobile, which has held the distributorship since 2004, will continue to operate a workshop as an independent service provider.
EuroSports, meanwhile, stressed its view that the relinquishment is "in the best interests of the group", to restructure its overall business portfolio for long-term sustainable growth.
"The group will focus on its existing Lamborghini automobile distribution business and development of Scorpio Electric brand electric motorcycles," it added.
EuroSports also said the relinquishment is not expected to have any material impact on the net tangible assets per share and earnings per share of the company for the current financial year.
Shares of EuroSports closed 0.5 per cent or S$0.001 lower at S$0.188 on Tuesday.