COE Bidding – 2nd Round of May 2019

[Mann123]

How you know their profit margin when their expenses is not made known to the public? Dun always jump to conclusions f

 

 

Some AD offer COE rebate like a joke and 9K drop in coe goes straight to their pocket making whopping margin for every single car they sold. From my point of view this type of practice by ADs is very unethical.

 

But willing buyer sign on agreement so they are also not at fault technically.

[Spurman]

How you know their profit margin when their expenses is not made known to the public? Dun always jump to conclusions first.

Relax.

Dealers. Traders salesmen all have families to feed. Showroom to maintain, be it small or big, shabby or glam.

 

Pills, cough syrups also high markup mah, in fact quite obsene on paper, but theres also other cost to compensate.

 

If u find price high, dun buy. Dun just tink of how much they earn lar.

[Lotr]

He is comparing like for like between two diff periods, and since all the cost such as ARF, OMV, excise tax are published, margin can be easily computed or even be found in the sgcarmart. When we refer to margin here, we are referring to gross margin before sales , warranty and operating expense.

Sgcarmart calls this Premium. Laymen like us calls it profit margin or margin

[Dilemma]

Take OMV x 2.35 (taxes) + COE = cost price of car to distributor

 

U have to factor in the rental, the commission and salary of the salesman, admins as well as cleaners of the showroom, warranty cost, servicing cost, taxes, freight, storage, etc ...

 

There's so much cost to importing a vehicle hence 10-20k above the cost price is already very lean margin.

[Vinceng]

U have to factor in the rental, the commission and salary of the salesman, admins as well as cleaners of the showroom, warranty cost, servicing cost, taxes, freight, storage, etc ...

 

There's so much cost to importing a vehicle hence 10-20k above the cost price is already very lean margin.

 

Back in 2016 when COE was above $50K, the profit margin of  bread and butter car selling at $90K +  could be as low as $6,000.

 

But the distributors still secured the COE as they have an annual sales quota set by the principal (manufacturer). Else they risk losing the distributorship.

 

Back in the early 2000, when PARF was 80% of OMV and taxes were much higher, Borneo Motors was selling their cars at breakeven.   

 

The distributor also makes money from post sales - servicing and maintenance of the car

Edited May 30, 2019 by Vinceng

[Ct3833]

Sgcarmart calls this Premium. Laymen like us calls it profit margin or margin

[Dilemma]

Back in 2016 when COE was above $50K, the profit margin of  bread and butter car selling at $90K +  could be as low as $6,000.

 

But the distributors still secured the COE as they have an annual sales quota set by the principal (manufacturer). Else they risk losing the distributorship.

 

Back in the early 2000, when PARF was 80% of OMV and taxes were much higher, Borneo Motors was selling their cars at breakeven.   

 

The distributor also makes money from post sales - servicing and maintenance of the car

 

Back in to 2000s. 

 

Kopi-O was 60 cents. Now its $1+.

 

Why is it so? Because there's inflation which rental rates, salaries, your normal chicken rice and everything also increase. 

 

So profit has to increase too due to the increased costs of living.

[Fat_slayer]

The calculations used by Sgcarmart is a bit flawed as it include COE and taxes in the base price.

COE and tax are components that belongs to the government....lol.

 

I tot the premium should be calculated with respect to the OMV which is the actual cost price of the car.  From this, we will be able to tell that some AD make profits more than the car makers which imo is very very high.  For e.g. the bread and butter cars has an OMV of around 18K but Sgcarmart website, we can see that the gross profit is more than that.  It is even more for luxury brands.

 

For comparisons, I don't think foreign AD makes more per car but they might have the advantage on economy of scale.

 

[Lotr]

LTA publish a spreadsheet monthly showing costs of the car (OMV+ARF+ COE, etc) and selling price and they used the word Difference to describe the difference between the cost and selling price.

[Dinosaur33]

U have to factor in the rental, the commission and salary of the salesman, admins as well as cleaners of the showroom, warranty cost, servicing cost, taxes, freight, storage, etc ...

 

There's so much cost to importing a vehicle hence 10-20k above the cost price is already very lean margin.

Thank you for this post. Like every business, they need to be profitable, otherwise how to provide good service to the customer. Every business has cost to bear, just that the consumer enjoying the service and product doesn't understand. These distributor are also answerable to the principal maker as well, otherwise they will risk losing their distributorship Edited May 30, 2019 by Dinosaur33

[Vinceng]

As the saying goes, no prawn, fish also good.

 

No matter how minimal the profit, every sale lost goes to a competitor.

 

As customers, car buyer's objective is to get a good deal. We are not charities to be concerned about distributors' profit levels.

[Kodiaqer]

As the saying goes, no prawn, fish also good.

 

No matter how minimal the profit, every sale lost goes to a competitor.

 

As customers, car buyer's objective is to get a good deal. We are not charities to be concerned about distributors' profit levels.

 

yup, economics 101

 

demand intersect with supply = price:)

[Lotr]

As the saying goes, no prawn, fish also good.

 

No matter how minimal the profit, every sale lost goes to a competitor.

 

As customers, car buyer's objective is to get a good deal. We are not charities to be concerned about distributors' profit levels.

I always thought it was no fish, prawn (shrimp) also good.

 

But later, a famous ex-Yishun resident said that if chicken is too expensive, can buy fish. So, no chicken, fish also good?

Dealers' profit is buyers' cost/loss is how I see it

[RogerNg_185295]

Back in to 2000s.

 

Kopi-O was 60 cents. Now its $1+.

 

Why is it so? Because there's inflation which rental rates, salaries, your normal chicken rice and everything also increase.

 

So profit has to increase too due to the increased costs of living.

He has issue with car distributors earning too much money. To me, as long as they earn money legally and provide jobs for the people , who cares how much they earn per car. Correct?

 

Doctors also earn a lot. Does it mean we should target them as well?

Edited May 31, 2019 by RogerNg_185295

[boonhat_91]

A business need to be profitable to stay alive, I agree. But it need not be profitable to provide good service. Good service to the customer should be the minimum expected from a business, no link to profitability.

 

Thank you for this post. Like every business, they need to be profitable, otherwise how to provide good service to the customer. Every business has cost to bear, just that the consumer enjoying the service and product doesn't understand. These distributor are also answerable to the principal maker as well, otherwise they will risk losing their distributorship

 

[AlfaLove]

To all those looking to buy new car:

 

Look out for AD which are clearing warehouse around mid-year. I remember that some conti makes offer additional discounts for units on Immediate Registration. So using COEs available on hand.

 

This saves having to wait up to 3 months for delivery before one can enjoy.

 

Also, have a list of the cars you would want to experience owning and driving. If you have an itch to scratch, and taking loan and undergoing the "pain" of saving up and monthly loan repayments, why drive a basic BB car?

[Jamesc]

Business needs to be profitable is so old fashion.

 

Uber loses billions every year.

 

This is the new business model.

 

Edited May 31, 2019 by Jamesc

[Jamesc]

To all those looking to buy new car:

 

Look out for AD which are clearing warehouse around mid-year. I remember that some conti makes offer additional discounts for units on Immediate Registration. So using COEs available on hand.

 

This saves having to wait up to 3 months for delivery before one can enjoy.

 

Also, have a list of the cars you would want to experience owning and driving. If you have an itch to scratch, and taking loan and undergoing the "pain" of saving up and monthly loan repayments, why drive a basic BB car?

If people cannot afford a b and b car get a conti?

 

What kind of financial advise is that?

 

Are you Trump's top financial advisor?