This article provides a simple summary of the retail perspective of automotive industry in Singapore. It will focus mainly on new and used/pre-owned car categories.
New cars in Singapore are sold through two main distribution channels.
The first channel is authorized by the manufacturers and includes manufacturer, importers, distributors, retailers and authorized agents.
The second one is grey importers/parallel channel, which encompasses manufacturers, overseas dealers, importers and retailers.
Nonetheless, these two broad channels exclude those individuals who import their vehicles on their own. Besides, it is important to note that the two channels differ in a number of ways that are explained below.
The warranty program of an authorized by manufacturers channel is usually supported by the manufacturer. For grey/parallel channel, the warranty program is strongly supported by the retailer.
Nonetheless, there are manufacturers whose warranty program is binding.
In case of product recalls, the first people to know are those in the authorized channel.
Besides, they have an obligation to contact all affected clients to bring back their vehicles for rectification.
Although it is possible to recall vehicles in grey/parallel importers channels, they usually lack a well-tuned product recall program. This may be detrimental to their operation, which is a risk to their competitiveness and sustainability in automotive industry in Singapore.
Authorized dealers normally maintain healthy stock levels. They also provide excellent and timely delivery. However, Grey/parallel importers normally maintain limited stock, although this does not mean they are not resourceful in their area of business.
Authorized dealers provide flexibility in options. They can customize a car to their customers. This is especially for affordable cars.
Lack of flexibility in Parallel channels
On the other hand, parallel channels lack flexibility in their options. They simply deliver what customers order.
The quality of after sales service offered by authorized dealers is high. This is because they have trained and experienced technicians and better diagnostic equipments. Besides, technicians undergo regular training programs on various automobile products.
The after sales service offered by parallel channel dealers is of lower quality. This is because the dealers normally outsource such services. Therefore, it is advisable to check out grey dealers from such a perspective.
Authorized car dealers in Singapore normally deals in specific variants and models. However, parallel dealers lack specialization in their operations. They deal in any variant and model as long as it meets the outlined guidelines, such as safety and emissions.
The choice between authorized and parallel channels depends on the individual needs of a customer. The list of various authorized car dealers in Singapore can be obtained from “AA’s magazine” or from their website www.aas.com.sg.
It is an overwhelming experience buying a used car in Singapore. This is because the market is highly segmented with numerous larger players and many small players. Therefore, it is a daunting task to find a dealer with reasonable services.
The risk of buying a used car in the country is similar to other countries with some additional complexities. For instance, Singapore car market is peculiar because of cultural influences and regulations. Such factors may affect the value of a used vehicle.
Therefore, anyone considering used cars imports from Singapore must ensure that the vehicle is inspected and evaluated by professionals such as AA. Most advertisers use the words “Vicom or STA evaluated.” However, these are just certifications on road worthiness.