Parallel importer Frankel folding up over debts

[User12343]

can go look for cheap new cars in the newspapers

 

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HEATED competition among parallel importers has claimed its first casualty: Frankel Motor, one of the more active players in the field.

 

The four-year-old company which sold about 1,000 mostly Japanese cars last year from its Frankel Avenue and MacPherson Road outlets, is in receivership after it fell behind on payments to financial institutions.

 

Companies like Bank of East Asia, Kenso Leasing, OCBC Bank and GE Money have filed lawsuits to try and recover sums ranging from $82,000 to $4.4 million from Frankel. Similar writs have been filed against associate Frankel Leasing; and their director Mr Ho Yik Fuh.

 

Salesmen at Frankel yesterday said they were unaware of its financial woes, even if the crisis has hit several customers. Some have made police reports to try and recover their deposits or get their cars delivered.

 

A police spokesman said 'we're looking into the matter'.

 

One buyer, information technology professional Jeremy Chan, 31, said: 'I booked my Toyota Axio in September, my certificate of entitlement was secured in October, but I got it only this Wednesday.'

 

He added that he was 'forced' to pay $3,000 on top of the purchase price of $60,000 to get it. 'It was a nightmare,' he said. 'I am making a police report too.'

 

Parallel importers emerged in the 1990s when car import rules were relaxed. From a slow start, they now make up 25 per cent of new car sales.

 

But success spawned scores of players, who undercut each other. Observers said this could have been Frankel's problem.

 

Two of its lenders - OCBC Bank and GE Money - have appointed receivers to try and recover some of the debts by selling off Frankel's assets, mainly cars.

 

OCBC and GE Money have appointed receivers, Ferrier Hodgson and Stone Forest respectively, to the task. OCBC is believed to be owed about $4.4 million and GE Money around $2 million.

 

Mr Timothy Reid of Ferrier Hodgson said yesterday his firm is advertising in today's Straits Times Classified section to dispose of a number of Frankel's cars, which are now in a warehouse.

Edited December 21, 2007 by User12343

[Karoon]

does frankel issue their own loans?

how come the finance houses don't go after the owners?

[Jc777]

issue own loans? hit by sub-prime? probably they didnt dig much into the buyer or approved loan easily.

[Nine_eleven]

well, that's a perennial risk of buying from a PI...

 

not to say that a AD won't fail too... at least they have the support of the manufacturer!

[Route88]

Sad case Intense competition

[Kieran1975]

They are one of the reputable PI in the market.....

 

I think more PI will burst soon due to lesser people changing car and oso AD bringing same model (stream & wish) to kill them off....

[Diehardsu]

Would u buy cars from Ferrier Hodgson which they going to sell.

I will not, to avoid invole in legal tussle later on.

[Zanter]

I didnt see the sale ad for the repo cars in todays classified? But then I saw Frankel still advertising wor. Who dares to buy? Maybe pay cash can get 1/2 price ..however may kena sued by OCBC & GE later

[Matix]

If there is an open auction, same as those by GE Money, quite safe to buy right?

[Diehardsu]

It was reported on ST Home Pg 6 leh

[Diehardsu]

Dun know, but Y get yourself involve

[Marquee]

well, that's a perennial risk of buying from a PI...

 

not to say that a AD won't fail too... at least they have the support of the manufacturer!

 

Well...once $$ is out of pocket, there is always risk involved. Business has no such things as manufactuer support or bank support; owe $$ pay $$, sure got support.

 

Rem the 1st KIA AD distributor in SG? Potential owners who paid the deposit (some even full price) were in the headlines when the company was under receivership.

[Kelpie]

Rem the 1st KIA AD distributor in SG? Potential owners who paid the deposit (some even full price) were in the headlines when the company was under receivership.

 

Last time Kia cars can't sell mah. Now this PI sells popular brands also kaput. Best to buy from AD. There is really no great incentive to buy from PI unless you die die want to get those models not carried by ADs. If I start a Poll, "Do you prefer to buy from a PI?" how much % of YES, do you think you can get here?

 

Regards,

[Nullifi3d]

Would u buy cars from Ferrier Hodgson which they going to sell.

I will not, to avoid invole in legal tussle later on.

 

Erm i don't get it, if Ferrier or GE is auctioning the cars off to repay back the finance companies, why are we still liable to be sued when the money that came from us is already used to pay back the debts?

 

I mean once you sign on the dotted line, it clearly states that you are the sole owner over the vehicle.

 

What kind of legal tussle are you referring to?

 

If everyone were to avoid these cars like a stigma of an ex-convict then the cars will never be sold. Well just my 2 cents.

[Diehardsu]

If they are not sold , then we can buy cheap cheap lor.Buy cheap at higher risk better right?

[Nullifi3d]

Well considering the cars have just only been moved to the warehouse it still maintains some level of acceptable storage quality. If you let it rot in the arms of an auction company in a warehouse where you don't know if the cars are being taken care of(engine start, free of dirt and mould, vandals) who's taking a higher risk then?

 

Anyway you know whats the price lists for their vehicles or do we have to go down personally with the intention to buy one?

[Porker]

MOST of the PIs get their cars from a few (don't know the exact number) importers. These importers are the biggest players in the market as they have contacts in Japan and Germany etc. Not many are able to fork out a large sum of $$$ to start this business as its capital intensive. Cars are not cheap.

 

So you see how many mark ups the cars been through? One from the supplier in the other country; One from the importer and finally the PI.

[Marquee]

Not going start another debate on PI vs AD. In general I agree with you. However, due to my previous great experience with one of the PIs and after sales, I will continue to buy from PI unless PI price is higher on relative terms.

 

Frankel sells popular brands of car does not mean that the company is well managed. We are only told about the fold up due to debts which may resulted from poor management or financial guidance.

 

Any company can be poorly managed. Reputable companies for decades can also go bankrupt; all its take is just one major wrong decision.

 

Whatever it is, when anyone sign on dotted line and pay some deposit, one is already taking a risk, be it a car or condo.

Edited December 22, 2007 by Marquee