Sweden’s passenger car brands, Saab and Volvo, fare well in Singapore’s highly competitive market.
The island state’s strict regulations on car ownership and the mere costs to even be able to have a car there makes this a both tough and different challenge for auto dealers.
On the other hand do these rules apply to all brands and sizes of cars, making Singapore one of the most transparent car markets in Asean.
Over the past five years, Volvo sells a little bit over 1000 cars per annum.
That is more than three times more than Saab.
Relatively speaking Saab has made most progress of the two during the last year. ScandAsia asked both how they sell quality cars in Singapore.
Generally speaking, what are the special characteristics of Singapore’s passenger car market?
“To buy a car an individual must first bid for a Certificate of Entitlement (COE). Cars in Singapore are very expensive. A Toyota Corolla will cost around SEK 350,000 including a COE. The number of COE is determined by the government. This means the number of cars on the road is actually controlled. And with a limited number of COE’s, buyers will have to bid for it. Prices of COE are currently around SEK 145,000,” says Hoe Lone, marketing manager at Volvo’s dealer SM Motors in Singapore.
” The population of Singapore is not growing. Hence demand for cars is generally constant,” he adds.” In a mature market situation, the only way for a car brand to grow market share will be at another brand’s expense.”
His views are echoed by Saab’s Steve Nicholls, regional director Asia Pacific – Saab Cars International, in Australia.
“The big difference is the need to get the special licence, a COE, from the government before you are allowed to buy and register a car. This is a device used by the authorities to limit the number of cars on the road. In addition, there are very heavy tax burdens on new car sales in Singapore which makes our products (and everyone else’s) very expensive,” says Steve Nicholls.
Given this, how do you position Saab in Singapore?
“Our positioning is consistent with our global strategy and the target group is remarkably similar. We do have some special interest categories that are unique to Singapore like Buddhist Monks!”
Volvo sticks to a similar strategy, resembling the brand’s international values.
“Volvo in Singapore is perceived to be a luxury car brand. It is currently the third best selling continental luxury brand. Volvo has always stood for safety and it is likewise in Singapore. We have a high percentage of customers that are professionals such as doctors, lawyers and accountants. Over the last few years we have also attracted many young executives to own our entry models such as the S40 and S60,” explains Hoe Lone.
He adds that Volvo has differentiated itself by not only providing a solid product but also by delivering a premium buying experience and a reliable after sales service.
This includes gimmicks that make one think of the big Swedish furniture store in town and not a car seller.
“We are still the only car dealer with a full size cafe offering cappuccino, five different type of teas, orange and apple juices etc, a theatre, a children’s playroom and free internet access.”
Saab sold 311 passenger cars 2003 (industry dealer data), and average 254 cars per year between 1999 and 2002. 2001 is a record year during that period with 302 sold cars. This year up to May 146 new Saab has been registered. If that trend continues you would end up with 350 sold cars 2004. Please comment on the numbers.
”We are generally pleased with our volume development in Singapore and are forecasting a similar result to last year,” says Steve Nicholls.
What is Saab’s goal for the full 2004?
”Apart from the volume and financial goals, we want to continue our tradition of excellent customer care making owning a Saab a true premium experience.”
Volvo is about three times bigger with 1100 passenger cars sold in 2003 and average 1064 cars per year a year between 1999 and 2002.
“We hope to maintain and grow our market shares steadily each year. This is possible with the new exciting products that Volvo has such as the new Volvo XC90, S40, V50 and much more. We enjoyed a huge increase in numbers in 2000 as that was the year the Volvo S80 was launched,” ends Hoe Lone.
