BANDAR SERI BEGAWAN

INDUSTRY players expect less than stellar sales for new cars due to the rising popularity of secondhand or used cars. Car dealers and sales representatives interviewed by The Brunei Times cite the rise in value of the Japanese yen and euro as one of the main reasons for the conservative projection.

“Japanese cars will not increase drastically, most distributors will still be seeing the same amount of car sales figures as we have seen this year; even if there is an increase, the most is maybe a five per cent increase, at best,” said an industry insider who wishes to remain anonymous.

He added that car sales for next year will most likely reflect the figures that have been recorded this year, with an average of 800 units sold a month.

“The Japanese Yen is still very high so car prices won’t decrease and on top of that we are competing with secondhand car dealers,” he said.

The industry source said that second-hand car dealers are averaging close to 100 units a month depending on the stock of cars they bring in which is sold at a lower rate than brand new cars.

“The cars are reconditioned so they are able to be sold much cheaper, of course,” he said. In a recent article, QAF Auto Sdn Bhd, the sole local distributor of BMW vehicles, hopes to match or slightly top last year’s car sales target for 2010 amid a challenging market, a marketing executive yesterday said.

“It will be more difficult next year because now the euro-dollar (exchange rate) is up so the prices of European cars will be more expensive and with the new models coming in, we have to maintain that the models have a premium price,” said Clement Chong, sales and marketing manager of QAF Auto Sdn Bhd.

The recent hike in car prices that resulted in many Japanese car brands raising their prices between $4,000 and $5,000 resulted in many customers not being eligible for car loans.

Previously automobile distributors allowed customers to drive new cars out of the showroom with a loan in place but without making a downpayment themselves.

He explained that the bank enforces all car loans to be approved with a minimum 12.5 to 15 per cent downpayment; however, some car distributors would eat into their own profit margins to sponsor all or some of the downpayment required.

The industry insider also said that the price hike, due to the Japanese yen, has greatly affected loan applications for most Bruneians due to the increase in monthly payments that now make them ineligible for a car loan. This has resulted in many of the customers turning to secondhand car dealers.

At the beginning of the year, sales of used cars surged mainly due to the recent increase in the prices of brand-new Japanese cars. “Usually we sell an average of five cars or less than five, but last month we sold about 20 cars and my boss has brought in more stock from Singapore because we see that we will continue (to see) this trend for this year,” said a used car salesperson interviewed in January this year.

She added that their busiest months are usually before the Hari Raya season but January was “incredibly good”. Another secondhand car dealer said it is possible for the car resale market in Brunei to do quite well this year also since customers are able to get a better deal by availing themselves of refinancing for used cars.

The Brunei Times

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