Koh Ching Hong Managing Director South Asia David Colwell ...
Koh Ching Hong Managing Director South Asia David Colwell ...
Koh Ching Hong Managing Director South Asia David Colwell ...
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<strong>Koh</strong> <strong>Ching</strong> <strong>Hong</strong><br />
<strong>Managing</strong> <strong>Director</strong><br />
<strong>South</strong> <strong>Asia</strong><br />
<strong>David</strong> <strong>Colwell</strong><br />
Finance <strong>Director</strong><br />
<strong>South</strong> <strong>Asia</strong>
Market Overview<br />
Source: IIMF<br />
Population 4.8 million<br />
Singapore has established itself as a major hub in <strong>Asia</strong><br />
Language English, Malay,<br />
Chinese, Tamil<br />
Currency Singapore Dollar<br />
Capital City Singapore<br />
GDP US$195 billion
Commercial Overview<br />
Growing economy Stable political environment<br />
Western style legal system and business<br />
environment<br />
Long term policy focus<br />
Regional trading hub with<br />
strong growth prospects<br />
Strong household and<br />
sovereign savings<br />
Significant investment in<br />
premium retail<br />
High population growth,<br />
high density living<br />
Source: IMF<br />
Benefits from <strong>Asia</strong>-Pacific economic development<br />
MNCs from Europe, India, US, China have set-up<br />
regional HQ. Continued influx of ex-pats<br />
Quick rebound from GFC<br />
Well capitalised and regulated banking segment<br />
Low sovereign risk (AAA rating on govt. debt)<br />
Continued expansion of premium retail sector<br />
GDP per capita CAGR of 6.8%<br />
Opening of two casinos has accelerated retail<br />
demand<br />
5.2m people expected to reach 6.0m by 2020<br />
Highest rate of home ownership in the world<br />
2005-2010 2010-2015<br />
GDP growth (CAGR) 12.2% 6.5%<br />
Population (CAGR) 3.3% 1.7%<br />
Unemployment rate
Automotive Overview<br />
Source: LTA<br />
Limited land area Major government investment in public infrastructure,<br />
£20bn by 2020<br />
Vehicle<br />
congestion<br />
controlled by<br />
government policy<br />
Singapore vehicle market is heavily regulated<br />
Certificate of Entitlement (COE) required to register a car<br />
Government policy is to increase car parc by 1.5% per year<br />
(2009-2011)<br />
High car costs Taxes and Duties amount to 127%<br />
Purchased COE is a 10-year licence<br />
Vehicles are 3 times more expensive than UK<br />
Interest rates are benign, 10-year financing<br />
Environmental<br />
policies are<br />
becoming more<br />
important<br />
40% tax rebate for hybrid and CNG vehicles<br />
Tax premium charged for diesel vehicles (due to NOx<br />
particulates)<br />
Vehicle CO 2 emissions has an increasing focus<br />
Current policy expires 2012
Business Model<br />
Vertically Integrated Retailer<br />
Sole importer and retailer for:<br />
Toyota since 1967<br />
Lexus since 1992<br />
Suzuki since 1977<br />
Hino since 2006<br />
Market leader since 2002<br />
Largest Aftersales network<br />
8 sites<br />
Employees: 660<br />
Parts<br />
Service<br />
Delivery PDI<br />
Service<br />
Showroom/Service<br />
Showroom<br />
Service<br />
B&P<br />
Showroom<br />
Service<br />
Inchcape has the best geographical coverage with sites in key locations<br />
B&P<br />
Service<br />
Service
2000–2006: Strong growth driven by government<br />
incentives<br />
000’ vehicles 2000 to 2006 CAGR growth 8.2%<br />
Source: Inchcape estimates<br />
Total Industry Volume (TIV)<br />
Average Age of Car (Years)<br />
Car parc was refreshed with average vehicle age of 3.5 years<br />
8<br />
7<br />
6<br />
5<br />
4<br />
3<br />
2<br />
1<br />
0<br />
Ave Car Age (in Years)
2007 – 2011: Ageing of the Car Parc<br />
000’ vehicles<br />
Source: Inchcape estimates<br />
Total Industry Volume (TIV)<br />
Average Age of Car (Years)<br />
TIV falling due to delay in 1-for-1 replacement cycle<br />
2007 to 2011 CAGR growth –21.9%<br />
8<br />
7<br />
6<br />
5<br />
4<br />
3<br />
2<br />
1<br />
0<br />
Ave Car Age (in Years)
Luxury and Premium segments are outperforming<br />
Inchcape well positioned to take advantage of growth in premium and luxury markets
Our top 5 Priorities<br />
Improving<br />
margin<br />
Growing<br />
market<br />
share<br />
Controlling<br />
working<br />
capital<br />
Growing<br />
aftersales<br />
Selective<br />
capital<br />
expenditure
Operational focus on our top 5 priorities to deliver our<br />
Customer 1 st strategy<br />
Growing<br />
aftersales<br />
Growing<br />
market<br />
share<br />
Mix focus on stronger segments<br />
Cutting edge innovation to accelerate repeat<br />
sales<br />
Optimise the Lexus/Toyota Hybrid advantage<br />
Strengthening VFM proposition through<br />
differentiated specifications<br />
New product introductions, Model life cycle<br />
management<br />
Programs developed for growing<br />
‘out of warranty’ segment<br />
Loyalty programs including extended warranty<br />
to grow retention<br />
Broadening the product portfolio to grow sales<br />
per visit<br />
Traffic<br />
Leads/Traffic<br />
Test drives/Traffic<br />
Order/ Traffic<br />
Enquiries<br />
Booking/Enquiry<br />
Intakes/Enquiry<br />
Innovation and operational discipline to grow revenues ahead of the competition
Operational focus on our top 5 priorities to deliver our<br />
Customer 1 st strategy<br />
Improving<br />
margin<br />
Controlling<br />
working<br />
capital<br />
Selective<br />
capital<br />
expenditure<br />
Focus on quality of revenues to leverage the market shift towards premium and<br />
luxury segments<br />
Tight gross margin management with upsell / mix management on each value<br />
driver<br />
Restructured the cost base to reduce headcount by 20% and total costs by £6m<br />
since 2007<br />
Proven processes in place to manage supply chain effectively<br />
Daily focus on aged stock over 3 months and debtors collection<br />
Closed non-customer facing pre-delivery and storage yards and consolidated<br />
two delivery centres<br />
Limited to necessary replacement items<br />
Continuing to deliver high returns through disciplined margin management and cost control
Programmes developed for the ageing car parc<br />
have enabled us to increase Aftersales contribution<br />
Strengthening<br />
VFM proposition<br />
Model mix<br />
management<br />
Introduced grading strategy to increase number of variants<br />
Differentiated warranty/service/loyalty offering<br />
Marketing calendar focused on value-added promotions<br />
Broadening segment coverage with new models; Suzuki Kizashi; Toyota Crown, Toyota<br />
Camry Hybrid<br />
Deepen segment penetration with new variants; Lexus RX270, Toyota Wish 1.8<br />
Refresh model line-up with special editions; Corolla (Altis) Elegance; Fortuner TRD<br />
Focus on improving segment share of higher margins premium models<br />
Suzuki Kizashi Toyota Crown Camry Hybrid Lexus RX 270 Toyota Wish
Programmes developed for the ageing car parc<br />
have enabled us to increase Aftersales contribution<br />
Membership<br />
benefits<br />
Product<br />
innovations<br />
Customer<br />
contact activities<br />
First impression lasts<br />
Extended warranty differentiates the ownership experience<br />
Competitively price standard servicing to maximise retention<br />
Body care program to look after vehicle appearance<br />
Body care express provides repair services as part of our preferred insurance program<br />
Value buys are a range Engine flush, Fuel treatment, Engine Protector and Nano-Detox<br />
treatments<br />
Strong focus on outbound service bookings<br />
Comprehensive customer contact programs to maximise retention<br />
Move from Km-based servicing to time-based<br />
Toyota Shield Toyota Shine Body Care Express Value Buys Service Centres
2012 – 2015: Road to Recovery<br />
000’ vehicles<br />
Total Industry Volume<br />
(TIV)<br />
Average Age of Car<br />
(Years)<br />
Source: Inchcape estimates<br />
Certificate of Entitlement (COE) has 10-year life span<br />
After 10 years, customer must renew their COE or scrap the car<br />
2012-2015 CAGR 25.1%<br />
Market recovery attributable to COE 10-year life span<br />
Market recovery<br />
8<br />
7<br />
6<br />
5<br />
4<br />
3<br />
2<br />
1<br />
0<br />
Ave Car Age (in Years)
2012 – 2015: Road to Recovery<br />
Trend Inchcape<br />
Demand for premium and luxury car models<br />
have increased as the population becomes<br />
more affluent (in the context of rising vehicle<br />
prices)<br />
Tax incentive in the form of “Green Vehicle<br />
Tax” rebate of 40% helps to encourage /<br />
incentivise “Environment-Friendly” vehicle<br />
purchases<br />
Rising vehicle costs and large families has<br />
increased demand for people-mover models<br />
Singapore government is encouraging<br />
consumers to use public transport instead of<br />
owning a private vehicle<br />
Widest range of premium and luxury<br />
models, covering hatch, sedan, SUV &<br />
MPV segments<br />
The largest supplier through its Hybrid and<br />
CNG model range, covering both mass<br />
market and luxury segments<br />
Inchcape has the widest range of peoplemover<br />
models, covering mass, premium &<br />
luxury segments.<br />
Range of Hybrid and CNG models<br />
available to taxi operators. Continue to<br />
explore new models. # 1 player in the<br />
small bus segment
New Product Launches<br />
LEXUS CT200h<br />
SUZUKI Swift<br />
TOYOTA Camry / Hybrid<br />
TOYOTA Wish<br />
LEXUS GS / Hybrid<br />
LEXUS RX / Hybrid<br />
TOYOTA Corolla Altis<br />
TOYOTA Vios
Increasing demand for green technology<br />
Inchcape brand partners leading their competitors with Hybrid Technology
Growing Aftersales<br />
Trend Inchcape<br />
Ageing car parc will prompt consumers to<br />
prolong vehicle’s lifespan by utilising<br />
genuine parts and service<br />
Convenience of Service Centre locations<br />
is an important factor for consumer<br />
choice<br />
Vehicles are being purchased by more<br />
affluent customers who will look after<br />
their purchases<br />
Inchcape has developed a range of<br />
membership packages for the ‘Out of<br />
Warranty’ segment where the benefits<br />
increase as the car ages, on the condition<br />
all scheduled servicing is completed<br />
Inchcape has the most extensive network<br />
of 8 repair centres strategically located<br />
throughout the island<br />
Inchcape offers one-stop aftersales<br />
experience and a broad product offering<br />
including bodyshop and spa services to<br />
increase retention and revenue per visit
Selective Capital Investments<br />
Refresh customer facing facilities<br />
Expanded Toyota and Lexus<br />
showroom to allow new model<br />
introductions<br />
Relocate Suzuki showroom to ‘motor<br />
strip’ on Leng Kee Road<br />
Economical investment to accommodate broadening model line-up
Inchcape Singapore<br />
Market recovery will be driven by the 10-year COE expiry<br />
Well positioned to leverage lower cost base as the market grows: business<br />
restructured to operate on lower cost base with lower working capital<br />
Strong Toyota / Lexus product pipeline to grow revenues<br />
Differentiated Inchcape Advantage operational discipline to grow revenue<br />
ahead of competition<br />
Proven business model with significant profit and cash generation delivering<br />
high returns<br />
Strongly positioned to take advantage of market turnaround
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