THE road doesn't always run smooth when you are a parallel car importer in a market as competitive as Singapore's.

When Pinnacle Motors held a roadshow of cars running on compressed natural gas (CNG) last month, a rival took out a large advertisement in the car category of The Straits Times Classified section running down such vehicles.

When asked about that very public poke in the eye, Pinnacle managing director Valerie Tan pauses for a few moments, shrugs her shoulders and then grins, saying: "It's OK, it's just business. I didn't take it personally."

Competitors, she says, "will do what they feel they need to do".

"I'll just take it as part and parcel of business," she adds.

That kind of nonchalant attitude is probably essential, given the cut-throat competition in the parallel car import game with 250 operators in Singapore fighting over an estimated 25 per cent market share of new private car sales.

The sector took off when vehicle import laws were relaxed in the 1990s and operators found demand in importing cars that authorised dealers did not stock.

They are the only source in Singapore for popular car models such as the Honda Airwave or Toyota Wish, for example.

Their prices for mainstream models may also be slightly cheaper than those charged by authorised dealers. And complaints over the years about poor after-sales service have prompted many importers to forge tie-ups with workshops.

But while the market is growing, so are gripes against parallel car importers. In 2006, the Consumer Association of Singapore received 1,435 car-related complaints - only time-sharing schemes drew more complaints.

And in December, Frankel Motor folded with millions of dollars in unpaid debt. It reopened subsequently under a new name but customers complained that the new firm wanted them to top up a few thousand dollars for their cars or forfeit their deposits.

Pinnacle, too, has encountered more than a few bumps on the road - from allegations of poor customer service to rumours that the company was closing down.

Ms Tan, 34, rejects the allegations and puts the talk - some of which is discussed in Internet chatrooms - to the doings of "less than professional" rivals, although she does not have any evidence of this.

But she is also a firm supporter of the industry, calling it a "vibrant, lucrative and challenging" industry where most of the players are "very committed".

But like all industries, it has "black sheep" who fail to realise that unprofessional practices in pursuit of a quick sale have long-term repercussions for the whole industry, says Ms Tan.

And she has been around long enough to know. She started Pinnacle with her husband, Larry, in 1996 to sell secondhand cars.
It was a good time to start such a business as certificate of entitlement (COE) prices were topping $100,000, making the second-hand trade very lucrative, she says.

But when COE prices fell, they took the second-hand car market with it. Faced with falling profits, Ms Tan decided to go into the parallel import business in 2001.

Pinnacle is today one of the largest operators in Singapore, with over 200 staff and six showrooms - more than any other parallel importer, points out Ms Tan. It also has a 15,000 sq ft workshop.

It sold about 3,000 cars last year across its range of 30 models, including the Honda Crossroad and Toyota Rush.

While her husband is currently assessing expansion opportunities in the region, Ms Tan takes charge of Pinnacle's local operations.

She estimates that the group - that includes its second-hand car, vehicle export and scrap metal units - made "more than $10 million" in gross profit last year on sales of about $250 million. Sales were $120 million in 2005 and $193 million in 2006.

While the parallel import business has been doing well, it has also been changing over the past three years, says Ms Tan.
Car buyers now, even those who go to parallel importers, are looking for "peace of mind" rather than the lowest price. They want to know that the firm is not a fly-by-night operation but that it will be around in a few years to help if something goes wrong with their vehicle.

Pinnacle recognises this and has invested in major initiatives to ensure the firm's long-term survival.

It has built a car workshop to service vehicles and sent its key managers to specialist training courses such as Spring Singapore's Business Leaders Initiative.

It has also undergone programmes such as PSB Corp's TUV SUD certification, a German-run scheme that verifies that a firm meets its exacting standards.

Ms Tan is confident that these moves have made her company as good as any of the established authorised dealers such as Kah Motor and Borneo Motors.

But she acknowledges that many car buyers are sceptical, prompting the firm to launch a rebranding exercise last year. This involved taking full-page ads in The Straits Times explaining what the company was about and what it stood for.

Ms Tan said the campaign helped Pinnacle differentiate itself from other parallel importers and is helping it "compete with the more established players".

The campaign also paid dividends in other ways, she says, with staff beginning "to feel a sense of purpose in what they do because the rejuvenated brand communicated a set of values they believe in".

Ms Tan, a Christian who attends the City Harvest Church, is a firm believer that "Christian values can be applied to the corporate marketplace".

That belief is behind the company's first corporate social responsibility project: a Christmas party for the Chen Su Lan Methodist Children's Home last year.

It was also one of the reasons the company champions the use of CNG-powered cars. CNG, says Ms Tan, is a "beautiful thing", adding that "there are cost-savings for the customers and it's good for the environment too".

CNG-powered cars emit slightly less pollution and the fuel used is cheaper km-for-km, compared with petrol-fuelled cars. Pinnacle has sold about half of the 400 CNG cars plying Singapore roads.

"We're not saints, and we don't pretend to be, but if we can sell a car and still do good, why not?"

Standing out

MAJOR MOVES

Pinnacle has built a car workshop to service vehicles and has undergone certification programmes such as PSB's TUV SÜD certification, a German-run scheme that verifies that a firm meets its exacting standards.

It also sends its key managers to specialist training courses such as Spring Singapore's Business Leaders Initiative.

BRANDING BLITZ

While confident that Pinnacle is as good as any of the established authorised dealers, the firm's managing director, Ms Valerie Tan, acknowledges that many car buyers are sceptical.

That prompted Pinnacle to launch a rebranding exercise last year, taking out full-page ads to explain what the firm was about and what it stood for.

The campaign helped Pinnacle to differentiate itself from its competitors, says Ms Tan. It also paid dividends in other ways - such as employees developing "a sense of purpose in what they do because the rejuvenated brand communicated a set of values they believe in".

This story was first published in The Straits Times on Feb 27, 2008.