Luxury ignores market size
Got to have it: A visitor browses through BMW brochures during the BMW road show at The Mall. Picture: Rudolf Portillo
Saturday, July 19, 2008
WHILE most businessmen would find investing their money in a franchise in Brunei highly risky, QAF Auto Sdn Bhd put this notion to rest seizing the opportunity that there is a market for luxury in any market size.
Roger Fletcher, general manager of QAF Auto, says the small market is one of the challenges in doing business, but there are small opportunities that go along with it.
"Because we're the only BMW dealership in Brunei, we don't have to worry about competition with other BMW dealerships, and that we only really have one competitor, that is Mercedes Benz, and people who like nice cars like both Mercedes Benz and BMW, so the challenge is really staying ahead of them," he says.
QAF Auto Sdn Bhd acquired the BMW franchise in November 1996 and since then, the BMW name has also grown along with their workforce.
"Initially we started off with about slightly more than 30 staff members and now we have 52 employees," says Fletcher.
QAF Auto Sdn Bhd invests heavily in staff training and this has strongly contributed to the sales and the direction that BMW is moving towards.
"We spend a lot of time and money training our people and most of them we send overseas. The BMW training centre for Asia is located in Kuala Lumpur, Malaysia, so we're constantly sending parts personnel, sales personnel and so on for training, which is a big part of our expense."
The service centre now services approximately 10 cars a day.
"There is a little bit of competition (with service centres outside the dealership) but the problem is for other people who are going to compete is that the cars nowadays are very sophisticated and there's a lot of equipment (that need to be serviced) ... We spend an absolute fortune to buy servicing equipment to train people to use them properly and I think that the people on the outside wouldn't be willing to invest that kind of money," he adds.
Most car manufacturers adhere to a strategy of avoiding a situation where customers take their cars somewhere else for servicing so they tend to keep the servicing equipment specifically for their dealers.
Walking into the dealership, one might think that it is simply one complete, however, as Fletcher emphasises, QAF Auto is not just a BMW car dealership, it has other entities as well.
"Basically we have three separate businesses under the one BMW umbrella sales, services and what we call lifestyle. We have three separate managers that are accountable for their own separate area so everybody has targets and goals, so we either achieve or over achieve," he says.
The lifestyle portion has accessories that any BMW or car enthusiast can splurge his money on, from umbrellas to sports bags to clothing.
Fletcher says QAF Auto plans to keep improving and to continue to increase sales volume.
"Our current volume now is 200 units, and I'm sure that next year it'll be 210, and the year after that 220, and so on."
He adds that with Brunei's small market there will come a time when the volumes will reach a saturation point.
"We are always looking to improve so maybe we can bring in a different range of cars. We have just recently released the BMW 1 Series, and that will be replacing the BMW 3 Series as an entry-level model, so it'll appeal to a whole new group of people at an affordable price of $50,000. So we are hoping that we can increase our volumes with that."The Brunei Times
Roger Fletcher, general manager of QAF Auto, says the small market is one of the challenges in doing business, but there are small opportunities that go along with it.
"Because we're the only BMW dealership in Brunei, we don't have to worry about competition with other BMW dealerships, and that we only really have one competitor, that is Mercedes Benz, and people who like nice cars like both Mercedes Benz and BMW, so the challenge is really staying ahead of them," he says.
QAF Auto Sdn Bhd acquired the BMW franchise in November 1996 and since then, the BMW name has also grown along with their workforce.
"Initially we started off with about slightly more than 30 staff members and now we have 52 employees," says Fletcher.
QAF Auto Sdn Bhd invests heavily in staff training and this has strongly contributed to the sales and the direction that BMW is moving towards.
"We spend a lot of time and money training our people and most of them we send overseas. The BMW training centre for Asia is located in Kuala Lumpur, Malaysia, so we're constantly sending parts personnel, sales personnel and so on for training, which is a big part of our expense."
The service centre now services approximately 10 cars a day.
"There is a little bit of competition (with service centres outside the dealership) but the problem is for other people who are going to compete is that the cars nowadays are very sophisticated and there's a lot of equipment (that need to be serviced) ... We spend an absolute fortune to buy servicing equipment to train people to use them properly and I think that the people on the outside wouldn't be willing to invest that kind of money," he adds.
Most car manufacturers adhere to a strategy of avoiding a situation where customers take their cars somewhere else for servicing so they tend to keep the servicing equipment specifically for their dealers.
Walking into the dealership, one might think that it is simply one complete, however, as Fletcher emphasises, QAF Auto is not just a BMW car dealership, it has other entities as well.
"Basically we have three separate businesses under the one BMW umbrella sales, services and what we call lifestyle. We have three separate managers that are accountable for their own separate area so everybody has targets and goals, so we either achieve or over achieve," he says.
The lifestyle portion has accessories that any BMW or car enthusiast can splurge his money on, from umbrellas to sports bags to clothing.
Fletcher says QAF Auto plans to keep improving and to continue to increase sales volume.
"Our current volume now is 200 units, and I'm sure that next year it'll be 210, and the year after that 220, and so on."
He adds that with Brunei's small market there will come a time when the volumes will reach a saturation point.
"We are always looking to improve so maybe we can bring in a different range of cars. We have just recently released the BMW 1 Series, and that will be replacing the BMW 3 Series as an entry-level model, so it'll appeal to a whole new group of people at an affordable price of $50,000. So we are hoping that we can increase our volumes with that."The Brunei Times
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