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Cycle & Carriage and parallel importers cross swords

By Blogger on 18 May 2011

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Cycle & Carriage, the authorised agent for Mercedes-Benz in Singapore, has riled parallel importers with a series of ads pointing out the shortcomings of parallel-imported Mercs, resulting in advertising authorities stepping in. According to local media reports, an ad by Cycle and Carriage read: "Cheaper Mercedes-Benz cars do come with standard accessories. Headaches, stress, sleepless nights, to name a few."

The Automotive Importers and Exporters Association (AIEA), a trade body of about 75 parallel importers, has filed complaints with the authorities over the newspaper advertisements.

AIEA's VP Lim Tze Yong was quoted complaining that the ads were "not justified" as they gave the impression that parallel-imported goods were counterfeited. The ASAS has since informed Cycle & Carriage that the ads had to be modified "in accordance with the Singapore Code of Advertising Practice" but has not received any acknowledgement from the firm.

Since parallel importers appeared in the early 1990s to break Cycle & Carriage's 40-year monopoly on selling Mercedes-Benz, the rivalry between the two sides has been bitter. But barring an ad Cycle & Carriage took out in 1996 - saying it would not honour warranty cards of parallel imports - the publicly listed automotive group has largely adopted a 'live and let live' attitude.

But industry watchers said the shrinking car market as well as rising competition from BMW might have prompted Cycle & Carriage to take a stronger stand now against parallel importers, which typically account for 8 per cent to 15 per cent of Mercedes sales here.

Since the new E-Class launched in 2009, there has been a significant rise in parallel imported Mercedes-Benz all around the island, most of which were offered about 10% cheaper than the Authorised dealer.

The rise in Merc parallel imports last year could also be due to the recession. One industry observer said there are still people who want to buy a luxury car during poor economic times but may not want to pay as much.

'So they go shopping for a parallel import,' he said. 'That is why a good proportion of the PI cars is made up of used luxury models less than three years old, imported from countries like Japan and the UK.'

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  • 1
Marcostan May 18 2011 07:47 PM
C&C can always lower their profit margin. If there's only a few thousands cheaper to get from PI, I believed most of the buyers are more willing to buy from C & C.
Ilmw May 19 2011 04:04 PM
It is 人情 vs 道理. In other words, if C&C is willing to accept lower profits, it is a bonus for consumers, but if they don't, it is within their rights.

Key is, does the consumers have an alternative? Can they tell C&C by voting and choosing alternatives?

C&C is taking average 30% from benz, PA 50% from BMW - both plenty of PIs.
EuroAutomobile is taking 60% from Alfa, any PI? None.
  • 1
 
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