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The recent slump in car sales has forced some local distributors to supplement their car sales by taking a dip in the parallel importer market

27 Dec 2010 | Local News : Singapore

Car dealers in the local market are starting to show the full effect of the reduced COE quotas with some of the top industry players resorting to retrenchment. The current plight has also forced dealers to look to new horizons to boost their bottom line.

One of the ways that the local Nissan dealer, Tan Chong and Sons Motor, is to make a bid for the parallel importer market. The dealer has set up a new showroom at its former Nissan showroom at Toa Payoh Lorong 8. The new parallel importer company, T8 Gallery, which is fully owned by Tan Chong will be looking to import all makes. Starting with Nissan cars meant for the Japanese Domestic Market and Infiniti (Nissan's premium luxury brand). They will also bring in European models at a later date.

Due to the ultra-high competition experienced in the parallel importer market, some dealers have resorted to underdeclaring their car values to post lower prices. Tan Chong however has emphasised that they have no intentions of doing so. Despite it being a common practise in the industry.

With the new showroom, Tan Chong is hoping to offset the slower sales currently experienced in their Nissan showrooms. In recent months, local showrooms carrying Japanese brands have been hardest hit as the government continues to strangle the number of available COEs further.

The COE prices are at an all time high with prices hovering between $60,000 to $70,000 mark. Sending bread and butter cars like the Toyota Altis soaring above the $100,000.

Since June, Borneo Motors has gone through three rounds of retrenchment whittling off as much as 100 employees. Other dealers of Japanese makes are also feeling the heat with Mitsubishi announcing recently that they will be closing their showroom along Alexandra Road and moving operations to a Mitsubishi sub-dealer, Fulco at Kampong Ubi.

Japanese brands have been hit hardest by the COE contraction with matters made worse by the weakening Euro and strong Japanese yen. Further reducing the profit margins of Asian brands while European brands become more affordable.

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