Beginner’s Guide on Starting an Automotive Business in Singapore
When you own a vehicle, whether a bike or a car or multipurpose vehicle or large umpteenth wheelers, there are endless opportunities that await you. Not only will it take you places, literally, but it could also help you expand your business networks. Moreover, selling vehicles to the target market makes you a vital link of the supply chain. Hence, starting an automotive business could render it lucrative if you are well versed in navigating its business roadmap.
Besides the necessity of traveling, a vehicle can do so much more than that. Vehicles of all sorts are now deemed as part of an individual’s lifestyle. There is a suitable vehicle to suit each style of living. Branded vehicles are all out to serve the customer’s desires and necessities.
Known vehicle brands may be the industry players, but there is room to grow for anyone interested in this industry. If you are interested in starting a business, get the assistance of a Singapore company registration to start things off. Thus, here is the guide on starting an automotive business in Singapore, which explains the industry practice, business registration, license, and permits.
For a prosperous island nation such as Singapore, one would wonder how enormous the automotive industry is. However, without batting an eyelid, anyone can see that Singapore still has the market strength for automotive cravings. If not for the locals, her neighbors can fill up vehicle orders in no time. What makes the automotive industry attractive is that the country has a unique vehicle regulation not comparable elsewhere.
For starters, the automotive industry here is regulated by the Land Transport Authority. Given the size of the island, Singapore has long restricted vehicle ownership. Though it may sound depressing at first, fret not as the government is always looking out for its subjects’ needs and wants. Although that may sound like a restriction, it works wonders for the economy and traffic.
If you are starting an automotive business in Singapore, be ready to adapt to how things work here. Conventionally, owning a vehicle should be as easy as getting a test drive (if applicable), paying the necessary vehicle price and taxes. The driver of the vehicle would also need to acquire the relevant driving licenses. After which, one can already go for the drive of their dreams. The vehicle dealer can do part of the vehicle ownership process if one requests to do so.
Here in Singapore, vehicle dealers may need to bid for the buyer’s certificate of entitlement (COE). For those who have no idea what a COE is, it is a certificate to own a vehicle in Singapore. For a first-time buyer or new vehicles, the COE entitles the owner to 10-year ownership. Without the COE, it is impossible to sell the vehicle to the interested party or acquire a vehicle of interest.
Most locals understand this vehicle ownership process. But foreigners may find this practice startling at first; what more if you are starting an automotive business. However, once you understand the whole process, you get the hang of things. Therefore, the COE is necessary for vehicle ownership in Singapore, even if it is a used vehicle.
Room To Grow
Most vehicles are suitable for use between fifteen to seventeen years. Thus, after ten years, most of these vehicles are still in good condition. However, some vehicle owners would consider upgrading their vehicles before the ten years is up. Hence, there will be many good used cars to go around.
In this light, starting an automotive business in Singapore may not need to be attached to a particular brand. Since there are plenty of used vehicles to go around, business owners can look into exporting these cars to other countries. The local market could be saturated with common brands, but there is a looming export market for used cars from Singapore.
Moreover, used vehicles from this country have a fair lifespan ahead of them. Thus, it becomes an opportunistic realm for those interested.
Besides, the government is looking to roll out the Land Transport Roadmap 2040, which includes phasing out fuel-powered vehicles to adopt electric vehicles. Thus, there is also an opportunity to dabble into starting an automotive business for eco-friendly vehicles of the future. Future automotive business owners could promote new brands that are environmentally friendly.
Automotive Business Registration: Requirements and Licenses
The basis of registering a business in Singapore begins with the Accounting and Corporate Regulatory Authority (ACRA). We can assist you with company incorporation services in Singapore to focus on your business plans. If you have the capital ready to start an automotive business, things can be smooth sailing. Otherwise, there are plenty of financial institutions for you to secure financial assistance.
For a traditional automotive business owner, one would have in mind the business premise. This is partly true as buyers would want to see, touch and test the vehicle for themselves. But digitalization plays a significant role in this post-covid-19 business scene. Physical premises for an automotive business is required but not essential in attracting customers.
Many start-ups are going digital, and interested buyers prefer to get genuinely informed before making a big-ticket purchase. In Singapore, buying a vehicle is considered a big-ticket purchase as even the COE is limited in numbers. The necessity of a business premise depends on the size of the business. If you need one, you can look out for available premises for rent. You could purchase the premise if your budget allows it.
Despite these necessities, there are business licenses you may need to acquire, such as the dealer’s license. It depends on the type of automotive business you are planning to do. If you are into used automotive, then it has to be the used vehicle dealer’s license. If you desire to sell unlimited vehicles, you would need to get a full-fledged dealer’s license. There is also the automotive business license that is an essential requirement. For more information on obtaining the necessary licensing for your automotive business, get in touch with a Singapore corporate service provider.
Starting an automotive business in Singapore can be exciting when you know where to head and where the opportunities lie. We may not be automotive experts, you can contact 3E Accounting to talk about your business dreams.