FOR longtime BMW dealer Performance Motors Limited, the ruthless world of luxury car retail is about to get even more cutthroat, thanks to a fierce new rival: a second BMW dealer.

BMW Group Asia announced on Friday (May 20) that Eurokars Group will open a full-fledged dealership for BMW on Oct 1 this year at 11 Leng Kee Road. The building currently houses Eurokars’ pre-owned cars business and will provide something of a stopgap; the privately held group is building its new corporate headquarters at 11 Kung Chong Road and will incorporate a space for BMW there.

The appointment will make BMW the eighth brand in Eurokars’ portfolio here. Helmed by executive charmain Karsono Kwee, a car enthusiast at heart, the group handles mainstream brands Mazda and MG here, as well as high performance marques McLaren, Pagani and Porsche, in addition to Mini and Rolls-Royce, both of which are BMW Group brands.

Performance Motors has handled the BMW brand here for more than 40 years. Its parent, Sime Darby Motors, retails more than 30 brands in 9 markets.

Car brands have worked with exclusive partners here since 2009, when Chevrolet ended a 2-dealership arrangement, but BMW Group Asia’s managing director Lars Nielsen says he decided to tweak the business after giving it some scrutiny. “We’ve been doing a review of our presence and our approach in the Singapore market, and that means that we have slightly amended our strategy going forward,” he said, with some understatement. 

But the move is surprising given that Performance Motors (which the motor trade habitually calls PML) took BMW to record sales here last year and put the brand on the top of the luxury sales chart for authorised dealers. “Let’s put it this way, we are very used to working with multiple partners in general, and there is a perspective from our side of always wanting to do the best that we can for customers,” Nielsen told The Business Times.

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Without directly referencing Eurokars’ handling of upscale brands such as Porsche and Rolls-Royce directly, Nielsen said there is room for a second dealer because customers here have an affinity with technology and luxury. “With (our product) outlook for the next decade to come, at least the next 6, 7 years, we see that there’s potential to expand sales even further,” he said.

On the other hand, Nielsen is not entertaining the idea of a third dealership for now. Nor is there any substance to the idea that Eurokars will eventually replace PML. “My experience over a couple of decades now in the car industry is that you do your very best to select real professionals to work with, and I believe that we have that with PML and Eurokars,” he said. “We’re not working with opportunists who need short-term gains.”

As for the rules of engagement, BMW Asia will control retail prices for the cars but Eurokars and PML are free to compete in other aspects such as customer service or how much they offer customers for trade-in cars. Asked how he intends to make them co-exist peacefully, Nielsen said: “I don’t want to make them play nice. Competition is supposed to take place in the market.”

Nielsen dismisses the idea that both dealers would simply take sales from one another. “I know PML really well. I have a feeling that they intend to retain every single customer that they have, and they want to perform as well as they have so far,” he said. “I would be disappointed if that was not their ambition.”

Ultimately it will be up to both dealerships to fight for their slice of the BMW pie, and for BMW buyers to take advantage of the situation, Nielsen said. “I consider both of my partners in the future to be absolute professionals. It is their opportunity to exploit the market to the fullest potential,” he said. “Just as customers will be exploiting them to the fullest potential.”