The lure of Leng Kee Road is irresistible not only for authorised distributors but parallel importers as well. Five companies which deal in grey imports will establish a major foothold in the traditional motor belt by this time next year when they occupy the ground floor of a new building called The Alexcier.

The Alexcier is a 30-year leasehold building for light industrial businesses. It has ramp-up and terraced units and is under construction, with TOP expected in March 2008.

The eight-storey development is located between Thye Hong Centre and the Cycle & Carriage Industries building (at 239 and 241 Alexandra Road), with entrances to both Alexandra Road and Leng Kee Road.

When the project was launched last September, its 16 ground floor units were immediately sold to the five companies in the parallel import trade.

The car showrooms are said to occupy only the ground floor because the rest of the 103 units on the upper levels are reserved mainly for offices.

One well-known parallel importer who has bought two units at The Alexcier for a total of $1 million, or about $380 psf, is BHP Auto. BHP already has a few showrooms spread over three floors at the Automobile Megamart on Ubi Avenue 2. But the company decided it was time to invest in a Leng Kee Road presence.

'We feel that we are ready to go to the traditional motor belt because we can provide the minimum level of service required by the industry,' explained a BHP spokesman.

He said the company this month opened its 50,000 square foot workshop in the Defu area, just across the road from the Ubi motor belt. In addition to normal service and maintenance, the BHP workshop also offers bodywork and spray painting booth facilities, as well as spare parts for the mainly Japanese models it sells.

'We now have the proper after-sales infrastructure, so no one can call us fly-by-night anymore,' said the BHP spokesman.

Another well-known company which has taken up three units at The Alexcier is VinCar. The company already has two shophouse units farther up the road opposite the Mercedes-Benz Centre at 356V and 356W Alexandra Road. But these are rental properties, said VinCar director Vincent Tan.

'We bought the units at The Alexcier because Leng Kee Road is the place where people go shopping for cars,' said Mr Tan. 'It is where all the major distributors are. If we have a showroom there, we will get the crowds who go there.'

For decades, Leng Kee Road has been a popular place to buy a new car because of its location. As a result, land and rental costs there are higher than in the other motor belt in Ubi and there is virtually no new space available.

Almost all the major brands and their authorised distributors are represented in Leng Kee, except for Nissan and Mazda. There is one parallel importer and one used car dealer in the area, but both are on the fringe at Kung Chong and Hoy Fatt roads.

Parallel importers had a record year in 2006 when 16,137 units were sold - or 13.8 per cent of all new cars registered. This followed a turnaround in the industry's fortunes the previous year when it posted a volume of 6,282 units.

In 2004, the parallel import scene appeared to be on the verge of collapse after the government cracked down on rampant under-declaration of the PI cars' open market value and other high jinks. The total number of PI cars plunged to only about 4,000 that year, from 2003's estimated 7,500 units.

The steep fall took place even as the overall passenger car market registered strong growth on the back of an increasing COE quota.