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Vehicle showrooms will remain closed and motor firms will not be allowed to conduct customer test-drives, although workshop services will be allowed to resume.

20 May 2020 | Local News : Singapore


Vehicle showrooms will remain shuttered, and motor firms will still not be allowed to conduct customer test-drives next month - news which is sending the motor trade into a tailspin.

In response to queries from The Straits Times, the Ministry of Trade and Industry said car showrooms, including test-drives, will not be allowed to resume operations from 2 June 2020. But companies can continue to sell vehicles online and deliver vehicles to customers, while workshop services will be allowed to resume.

Showrooms will not be allowed to resume operations, but online sales and deliveries, as well as workshop services will be allowed to resume
Motor traders said the move will mean sales coming to almost a full stop for three months, posing a huge financial burden to the industry.

They hope that bidding for Certificates of Entitlement (COEs) - suspended since April - can resume, so that some sales can be made.

The Land Transport Authority has not yet announced whether COE bidding will resume next month. Neither has it released the quota for the May-July period.

Sales and Marketing Head Ron Lim at Tan Chong Motor, which is the agent for Nissan, said of COE bidding, "If we can at least get some stock out to pare down inventory. Or else shipments keep coming in. Vehicles are not exactly the easiest things to store, and duties still have to be paid."

Singapore Vehicle Traders Association President Eddie Loo said the association has written to the Government to appeal for business to be allowed to resume. "We can't be worse than McDonald's, right?" he said. "We can put in measures to make it safe to visit showrooms. As for test-drives, we have sold cars without test-drives before. It can be done."

The circuit breaker measures have hit dealers hard through costs associated with inventory, parking, and depreciation
Mr. Loo said the industry understands the need for the circuit breaker measures and has been patient during the two months. But for business cessation to go for another month is "causing a lot of chaos, and costing us a lot in inventory, parking charges and depreciation". "It is killing us," he said.

He added that dealers are facing additional financial burden in the form of financing charges. "The banks are still asking for their loan repayments," he said, referring to the loans dealerships take on their stock.

Mr. Loo said the suspension of car sales is also affecting consumers. "If you lose your job, the first thing you want to get rid of is your car. But now, you can't even do that," he added.

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