FRANCE's Renault is poised to become the latest carmaker to become its own importer and distributor in Singapore.
The move, expected to take place as early as mid-October, will relegate Wearnes Automotive - a subsidiary of listed WBL Corp - to the role of dealer.
Wearnes took over the Renault franchise from entrepreneur Peter Kwee's Group Exklusiv last September for around $12 million.
A Renault executive, who declined to be named, said: "There will be a change in structure. But our partnership with Wearnes will remain. It will be a win-win situation."
He indicated yesterday that Singapore would be the first Asia-Pacific market where Renault is setting up a 'national sales centre' - a term used widely by manufacturers to refer to a fully owned import-distribution operation. He added that China and Australia could follow soon.
There are no plans at the moment for a change in Hong Kong, where Wearnes Automotive also holds the Renault franchise.
Outside Europe, Renault has national sales centres in Africa and the Middle East.
In Singapore, Renault's imminent change comes on the back of similar moves taken by other vehicle manufacturers in recent years. They include Volkswagen, Bentley, BMW, Mercedes-Benz, Ford, Volvo and Jaguar.
Audi will do so on Oct 1.
The financial impact on WBL is unclear at this stage. But typically, dealers make thinner profits than importer-distributors.
The group's car business posted a 12.5 per cent rise in revenue to $223 million for the first-half ended March 31. Attributable profit was up nearly 40 per cent at $8.4 million.
A WBL spokesman would say only that 'discussions are ongoing' with Renault.
Observers expect the open-market value (OMV) of Renaults to fall, like OMVs of cars from manufacturers which have assumed importership. OMV is the base price on which all vehicle taxes apply. The lower it is, the more competitively a vehicle can be priced.
"I understand they are aiming for a 25 per cent reduction," an industry source said.
Consumers will probably have a wider range of models to choose from.
Currently, Wearnes offers only the Megane and its derivatives. Renault's range includes the executive Laguna, luxurious Vel Satis, and compacts and sub-compacts such as the Clio, Twingo, Modus and Logan.
A rise in sales would mitigate WBL's foreseeable drop in margins for Renaults.