Bankers eye mostly Merc, BMW rentals
Not all car rental firms will benefit from the $500,000 spending seen for IMF/WB event
THE estimated $500,000 that participants of the IMF and World Bank meetings are spending on car rental will not benefit all firms because of the demand for mainly Mercedes-Benz and BMW models which are chauffeur-driven. Even if these luxury cars are hired out without a chauffeur, that is, on a self-drive basis, rental firms say the companies taking them will have their own staff as drivers.
Singapore is hosting the annual meetings of the board of governors of the International Monetary Fund and World Bank. The meetings run from Sept 13-20 and will be attended by VVIPs such as heads of government, finance ministers, and central bank governors.
As the official transport partner for the high-profile event, German luxury carmaker BMW is already providing a fleet of 545 chauffeur-driven saloons, more than 80 per cent of which are the flagship 7 Series saloon with the remainder almost equally divided between 5 Series and 3 Series sedans.
But some car rental companies say they have also experienced brisk demand for their 'luxury models', which in this case refers mainly to only two cars - the Mercedes-Benz E-Class and BMW 5 Series.
'The reference group for the luxury category in Singapore is the 5 Series and E-Class,' said the marketing manager of one of Singapore's top five car rental companies. 'Demand from our clients during this period is for these two models. After they are taken up, they move to the next tier - to cars like the Toyota Camry.'
A senior executive of another car leasing company said all his customers are foreign banks and demand was higher than he was able to satisfy. One reason was the need for a chauffeur, and another was the requirement for either a Mercedes or BMW. 'We didn't have enough Mercs, so we had to subcontract a few units,' he said. 'We also had to rope in extra staff as chauffeurs.'
Although he declined to give the exact number of cars his company has hired out for this period, he did reveal that it was not more than 10, with equal numbers of both E-Class and 5 Series models. 'I believe that up to 100 luxury cars have been rented out for this four-day period,' he added. These four days refer to Sept 13-16, the peak period of the week-long event when the majority of meetings are scheduled.
The standard cost of a chauffeur-driven E-Class or 5 Series is $100 per hour or about $1,000 a day, excluding an after-office hours surcharge. With an estimated requirement of about 100 cars over the next week, the industry's total receipts could come up to as much as half a million dollars.
But not all of the 30 active players in the rental and leasing industry are benefiting. Some, like Kah Motor, have not seen a spike in demand. Kah Motor is the authorised distributor of Honda cars and its rental fleet is made up entirely of the Japanese marque.
Only about 10 companies are believed to be supplying cars for the IMF and World Bank event. Singapore's biggest rental and leasing company is CityLimo. Owned by transport giant ComfortDelGro, it has about 1,400 cars. Next is Orix with about 1,100 units. Other significant players include Prime Leasing and Motorway.
(c) 2006 Singapore Press Holdings Limited
Business Times Singapore