Brunei's Local News - Brudirect.com

Bandar Seri Begawan - When Bruneian motoring enthusiasts who patronise only Michelin tyres begin to opt for the cheaper alternative BF Goodrich, it's a sign their spending power might already have been weakened.

Distributors and retailers surmise this trend involving the shift to lower priced tyres and their anaemic sales last December is due to a combination of increased prices as a result of the global economic slump and stricter loan approvals enforced in Brunei Darussalam.

Car tyre distributors and retailers saw a significant slump in sales of up to 50 per cent during the bonus period of December to January.

"(During the December 2007 bonus period) business was so busy and hectic that we didn't even have a chance to eat our lunch but this time, in De - cember, it was quite quiet and there wasn't a lot of business," said Debbie Tan,

manager of Westin Automotive Sales and Services Sdn Bhd. The tyre store, located in Menglait, saw a drop in sales estimated at 50 per cent compared to the year before.

Sin Hup Huat Co also saw sales drop but at a slower pace of 15 to 18 per cent, according to general manager Jacky Yee.

"We carry affordable tyres to high-end, branded tyres like Michelin and now the spending power is definitely lower because people are being more economical in what they are purchasing," said Yee. "Now those people who used to purchase Michelin tyres have dropped to purchase BF Goodrich tyres." He added that the spending power isn't as strong as the recent years mainly due to the loan and credit card repayments catching up with people's spending habits.

"Last time an officer that earns $4,000 to $5,000 could come in and buy branded tyres but now the same customers only have a few hundred dollars to spend after all the repayments," he said.

Westin Automotive's Debbie likewise observed customers are now looking for cheaper tyres.

"There are different brands of tyres ... but our sole distributorship is for Federal tyres, which is a quality affordable brand of tyres," said Tan. The prices of tyres increased last year by about eight per cent and the target market that Westin has are very price conscious.

"Even if the price of tyres goes up by only $5, our customers will turn around and look for another place, so it was difficult," she said.

One tyre store, however, managed to sustain its average sales for the bonus period.

Guan Ho Hill's sales were steady, with price increases of five to 10 per cent not slowing down sales during the bonus month.

Kong Hoo Kok, general manager of Guan Ho Hin, said the company has done its projection of sales likely to start dropping.

"The increasing price of tyres is one of the reasons but nowadays the banks are also being stricter on the loan approvals so not everyone can just go out and get a loan so easily anymore," he said.

All three tyre companies said that even with the low projection in sales for the year, they will not reduce their orders to make up for the losses and instead will keep the same number of orders.

"We will still bring in the same number of stock for our next order to have extra tyres for sale in case people come over," said Kong.

Tan said Westin will also maintain its stock and highlight the 15-month warranty for the Federal tyres. -- Courtesy of The Brunei Times