Euro Hike Brings Woes To Car Dealers
By Azlan Othman

Bandar Seri Begawan - Despite the boom in car sales amid import duty reductions, several automobile dealers have been experiencing a pinch in their business as a result of the hike in the Euro.

One dealer of continental cars told the Bulletin that they even had to face a zero profit margin for certain car models, signifying the desperation on the part of such dealers in making a sale.

Currently, the Euro is traded at around B$2.1 to the Euro, compared to several years ago when the Euro was priced at around B$1.7-1.8.

Hence, cars that were priced around B$30,000 when the Euro was low have now shot up in price to B$40,000, thereby prompting customers to opt for other Asian luxury cars instead.

It is not surprising, meanwhile, that local automobile dealers, who are distributors of Japanese, Korean and even Malaysian models, have experienced healthy growth in sales, reaching nearly as high as 1,300 units sold, close to the end of the second quarter of this financial year.

The latest statistics from the Brunei Auto Traders Association (BATA) indicates that six car models, the majority of which are continental cars, have recorded absolutely no sales at the end of May 2004.

Observers pointed out that the reasons for such a trend is the unavailability of new models in the local market, an unassertive marketing strategy and higher car prices due to the hike in the Euro.

The Bulletin also learnt that a new face lifted model would only be available once every four years.

"That's the problem when dealing with continental cars, as trading is done in Euros. Worst of all, the competitive price of cars in the local market has significantly put a certain amount of pressure on the continental car dealers," said one dealer.

"The strong competition has even led dealers to use different marketing strategies, including organising lucky draws," said another dealer.

By the end of May, Toyota still dominated the local market by selling 1,279 units, followed by Mitsubishi with 481 units, Nissan with 453 units and Hyundai with 424 units. BATA is targeting to sell between 10,000 to 10,500 units by the end of the year. -- Courtesy of Borneo Bulletin

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