Car salesmen: It's impossible to survive

[Billcoke]

 

Car salesmen: It's impossible to survive

 

New car sales down by between 30-50%, say sales execs. An 18-man team has shrunk to just 5. -TNP

 

Tue, May 25, 2010

The New Paper

 

By Pearly Tan

 

ON GOOD months last year, Mr Rahmat Mohamad Isa could sell up to 10 new cars a month.

 

With an average $500 in commission for each car sold, the sales manager could take home just under $6,000, basic pay included.

 

But today, those good old days are over, said the veteran car dealer.

 

He said this is the worst slump he has seen in his 16 years in the car industry.

 

Mr Rahmat, 60, managed to sell only two cars last month. He said the situation has been dismal for the past few months, but could not provide exact sales figures.

 

He took home only about $1,500 last month. On average, he earns $3,000 a month.

 

He expects this month to be even worse - he has not sold any car yet.

 

He lamented: "Our basic pay is only about $500 and if we don't sell any cars, it's almost impossible to survive.

 

"Some of my friends who used to sell about 30 cars a month have not sold a single car in two to three

months. That's how bad the industry is."

 

Mr Rahmat is not alone.

 

Ten other car sales executives The New Paper spoke to at showrooms along Alexandra Road, Ubi and Turf

Club Automobile Emporium said sales of new cars have fallen by between 30 and 50 per cent from last year.

 

The New Paper contacted at least five car distributors here, including Kah Motor, Borneo Motors and

Komoco Motors. But all declined to reveal their sales figures.

 

New vehicle sales could possibly sink below 55,000 cars this year - less than half the average 117,000 sold

each year in the last decade, reported The Straits Times earlier this month.

 

Certificate of Entitlement (COE) prices hit a 10-year high last month - about $49,000 for open category - due largely to a reduction of COE quotas which came into effect that month.

 

The result? New cars have become more expensive.

 

 

For Mr Rahmat, his 18-member sales team at Car City, a parallel importer, has shrunk to just five people.

 

The company sells Japanese, Korean and continental cars.

 

There was a time when he was glad just to catch a 15-minute breather between attending to customers.

 

Now,walk-in customers are fewand far between. Said Mr Rahmat: "Our showroom used to be so packed, even the sales director would have to help attend to customers.

 

"Now, he can stay in his room because there are just so few customers. Many colleagues knew they just

couldn't survive in this industry any more and decided to change jobs."

 

Some have set up their own businesses while others have moved to the real estate industry hoping to earn

more, he said.

 

Mr Rahmat now spends his day chit-chatting with his colleagues while waiting for the occasional customer

to show up.

 

He considers himself lucky as his two grown children help to support the family.

 

"I have some savings and my children are working, so it's not so bad. But some of my colleagues have even

fallen into debt because they earn too little," he said.

 

Few customers

 

When The New Paper visited the Turf Club Automobile Emporium onTuesday, there were few customers.

 

Some dealers said the situation is the same on weekends.

 

Said Mr Rahmat, who was casually dressed with his shirt tucked out and unbuttoned at the top: "We used to wear ties and tuck our shirts in. But now, there's no point dressing up. There aren't any customers to serve."

 

Over at Alexandra, the situation at some of the spanking new showrooms was the same - few customers, many sales executives.

 

Car salesmen The New Paper spoke to said they typically earn a basic salary, but rely on sales commission for the bulk of their income.

 

A sales executive, who wanted to be known only as Ms Lim, said: "If I'm lucky, I can sell one car a month

now. But I have colleagues who have not sold a single one in a few months.

 

"Customers now think thrice, even four times before buying a car, whereas before they used to make quicker

decisions and doless homework."

 

The number of new cars registered fell by 29,000 - from about 97,000 in 2008 to just 68,000 last year, according to the Land Transport Authority's (LTA) website.

 

The used car market, on the other hand, has grown.

 

In the first three months of this year, 25,754 vehicles changed hands, up from 19,704 in the same period last

year, according to a Straits Times report last month.

 

Mr Damien Lim, 34, an IT manager, was one of those who chose to buy a second-hand car over a new

one.

 

"I got my Honda Stream within two weeks and I avoided the disappointment of not getting a COE, especially

when prices were going through the roof," he said.

 

Mr Lim paid $65,000 for his three-year-old car. A new one costs about $90,000 including COE.

 

Professor Paul Barter, an urban transport analyst, said it's unlikely COE prices will return to as low as they

were before.

 

He said: "With the supply of COE down and the demand of cars remaining constant, prices naturally rise.

 

"And if the economy continues to do well, the high COE prices look set to stay for awhile. Or at least until

people become discouraged at the high COE prices and switch to

[Stary]

For revealing so much to the media, I got a feeling that Mr. Rahmat is the next to leave this industry.

 

 

[Watwheels]

Not all is lost. Still can survive on used car industry. Even AD are going the used car route, trading in their used brand of cars and selling them. Just need to be flexible in their sales stradegy.

[Sabretan]

go property....sales people..as long as they keep a good reputation, they can move from property to car and vice versa...

[Ahseng]

500 commission per car? is that fo real?

[Kangadrool]

Some salesman tell me $200 per car niah (from an low volume AD). Dun know zhun more.

Edited May 25, 2010 by Kangadrool

[Mike1234]

The commission rate actually depends..

 

The larger the car you sell, the more you get.

 

Isn't it?

[Vextan]

i always have the impresion that some car sales men earn a lot. a friend who is tan chong's car sales man, he started with nothing and now owns three condos, and drives a old nissan march. during the good time he was busy like hell. he earns not just from commision, but also from the dealer when buyer trade in and from bank when get car loan. however, i know car sales men are no friend.

Edited May 25, 2010 by Vextan

[Tarzan666]

Went to Alexandra showrooms all SEs zoomed on me coz little or no customers ard. Good time buy car if u have deep pocket. Hehe.

[Krado]

That's for new cars... second hand cars leh?

[SimonTan]

PI salesman only earn 500 per car?

No wonder the salesman like to cheat here and there to earn more $$$ at the expense of the PI reputation!

 

PI if they gang up...like what the Spa association did lately...to boost up their image.....I think there will be more confidence in buying from PI.

 

[Kangadrool]

If you are cash rich, can try being a freelance used car salesman. Popular Jap cars can easily makan $5-10K each car. 1month 1 sale can shake leg liao. Dun need to depend on company's commission. But, you take a lot more risks too.

Edited May 25, 2010 by Kangadrool

[Mach23]

If you are cash rich, can try being a freelance used car salesman. Popular Jap cars can easily makan $5-10K each car. 1month 1 sale can shake leg liao. Dun need to depend on company's commission. But, you take a lot more risks too.

 

You mean being a car trader not a salesman cos you'd have to purchase the car and assume risk/depreciation?

[Mach23]

i always have the impresion that some car sales men earn a lot. a friend who is tan chong's car sales man, he started with nothing and now owns three condos, and drives a old nissan march. during the good time he was busy like hell. he earns not just from commision, but also from the dealer when buyer trade in and from bank when get car loan. however, i know car sales men are no friend.

 

Like actor/actresses, if they can put their hard earned money into good use during their heydays and not donate to the IR or LTA (expensive cars)...they'll be a happier lot later in life ...

[Kangadrool]

You mean being a car trader not a salesman cos you'd have to purchase the car and assume risk/depreciation?

 

yup. There are quite a handful around; look out in SgCarMart. Some claim direct sellers, some put under sole proprietorship company, some same person, but different mobile phone numbers on different ads and some offer to drive car to your doorsteps for viewing.

[Ladykillerz]

now we can see a little change done by our SG govt, how many people will suffer.

hmmmmmm... how wise is the planning~

[Picanto]

i always have the impresion that some car sales men earn a lot. a friend who is tan chong's car sales man, he started with nothing and now owns three condos, and drives a old nissan march. during the good time he was busy like hell. he earns not just from commision, but also from the dealer when buyer trade in and from bank when get car loan. however, i know car sales men are no friend.

 

these are the high flyers. not everyone in TC is a high flyer lah.........

[AndrewLee72]

Just my thots : you see now the AD / PI got into such a sorry situation - who to blame : can I dare say they should hold maybe 40% of the blame - why - cos they all gong gong go in to bid / jack up the COE to this high... sigh...

 

Ok that aside, I know it is impossible to make everyone bid at the low price... but its dam Ironic isnt it haha...Yes true lah - COE quota lowered, all biders chionggggggg... so ok lah now shioks liao lah... all new cars sales hit the all time low...Sales man start changing job... sigh.....