Dealers go big on aftersales as margins shrink for new car sales

DWINDLING margins on new car sales mean Singapore’s dealerships now get as much as half of their revenue from aftersales instead – which includes customer service, car repair and servicing, as well as spare-parts sales.

Earnings from new car sales have fallen in recent years, as both sales volumes and profit margins have shrunk.

First, Singapore’s zero-growth policy for passenger cars has meant that the Certificate of Entitlement (COE) quota – and accordingly, new car sales – is dictated by the number of deregistrations. In the current environment of high COE prices, owners are reluctant to deregister.