Short term: More bargains. Long term : More online focus, less real-life interaction, and an even more competitive market
When the Circuit Breaker (CB) measures were enacted on April 7, 2020, it was clear things were not going to be the same for all of Singapore – its car industry included.
Three months on, it’s quite clear that some things are already very different. Car buyers who had intended to buy a car in January but postponed their decision until now, will find that the entire experience of buying an automobile has evolved in significant ways.
During the CB, the big losers were car dealerships. With showrooms closed and with auctions for Certificates Of Entitlement (COEs) suspended, new cars could not be registered, meaning cars in stock had to stay in their lots, taking up storage space and incurring costs. Service centres were shuttered (until June 2), except for emergency repairs, which meant another revenue stream dried up.
The industry’s response to the two months of forced inaction was clear: Take the buying experience online, dangle big discounts in front of buyers, and amass as many orders as possible to get the cash flowing once again when COE bidding resumed (see our COE analysis story for more on this).
“If we leave COEs out of the equation for now, and looking at the competitive pricing we’ve seen with the online sales throughout the CB period, it really shows that it’s a buyer’s market right now. Car dealerships have no choice but to build a backlog of orders so they can resume business when COEs return,” said the sales manager of a European brand CarBuyer spoke to.
The immediate effect of that would have already been seen by regular readers of CarBuyer.com.sg. Almost every car brand in Singapore held online sales events during the CB measures, with a smorgasbord of various promotions, and some of our most popular online stories were naturally those reporting big bargains and online sales.
Here’s a list of the online car sales and related events we reported on during CB, but it’s far from a comprehensive listing
– Audi’s new online showroom debuted, and it had significant discounts of more than S$20,000
– BMW also established its online showroom in April, and in June it kicked off JoyFest 2020 with more discounts and special financing, claiming discounts of up to S$63,000
– Honda and Mazda offered “name your own COE” deals.
– Cycle and Carriage held numerous flash sales for its brands Kia, Citroen, DS Automobiles, Mitsubishi.
– Inchcape, with Toyota and Lexus (under Borneo Motors) and Suzuki (under Champion Motors) had demo car sales, auction sales, and steep discounts for its cars.
But online promos do not a new era of buying make – did these sale events actually work with much of the public tightening their belts because of COVID?
CarBuyer contacted a number of brands for comment, and while (as usual) none would release specific figures, all of them reported strong interest and positive responses to their new sales initiatives.
Jasmmine Wong, the CEO of Inchcape (for Singapore and Greater China), told CarBuyer: “It has always been a buyer’s market and at Inchcape, we believe in the value of listening to the needs of our customers. We still saw an interest in vehicle purchase amongst our customers in the past few months, but our role then was to make these choices available and accessible to interested buyers.”
“The response has been very good. We have observed a healthy increase in website traffic as well as a lot of enquiries through our various channels such as the sales hotline, live chat, and Facebook Messenger,” said Christopher Wehner, the managing director of BMW Group Asia.
“The response has been definitely more encouraging than pre-Circuit Breaker, when showrooms were operating. During CB, we also saw more customer traffic visiting our brands’ websites,” said Dawn Pan, the director of multi-franchise operations for Cycle & Carriage.