More than 150 motor workshops are expected to move out of Sin Ming Industrial Estate in the third quarter of 2016, to free up land for higher intensity development as part of the Housing and Development Board (HDB)’s Industrial Redevelopment Programme.
HDB said that all affected tenants have already selected their replacement units in a new multi-storey complex, AutoCity, right next door.
Those moving to the new high-rise complex will get to operate with improved facilities, including higher electrical loading and ample loading and unloading bays.
However, 938LIVE understands that some operators have not decided if they will eventually make the move.
RELOCATION COSTS PROHIBITIVE FOR SOME WORKSHOP OWNERS
Mr Francis Lim, president of the Singapore Motor Workshop Association, said that the new units at AutoCity are of a bigger size, equating to higher rental.
Mr Lim added that the workshops that are not planning to relocate are mostly “old-timers” without successors. According to Mr Lim, it does not make economical sense to dismantle old equipment and relocate it. On the other hand, he said that these tenants are unwilling to shell out money to purchase new equipment. It is also difficult for these workshop owners to keep up with the pace of technological advancement relating to diagnostic equipment and computers for cars, he said.
Some tenants have closed their shutters early and transferred their leases to new owners, who will take up the allocated units in AutoCity.
Lim Tan Motor, who operates from three premises within the Sin Ming Industrial Estate, is one such company. It decided to give the offer to relocate a pass and operate from its remaining two units, which are unaffected by the ongoing redevelopment plan.
Mr Steve Kang, director of Lim Tan Motor, said if the company moved a unit to AutoCity, it would be scattered and there would be redundancy in terms of manpower. Manpower was a particularly relevant consideration with tighter quotas for foreign manpower, Mr Kang added.
He also said that the company was preparing for a downturn in the industry in the next four years.
While Ricardo Auto Centre will be moving to AutoCity, absorbing any additional costs, its director Mr Jeremy Soh acknowledged that these expenses would be a burden for some in the industry, especially when business opportunities seem set to shrink in the coming years.
“Cars are being taken off the road, a lot more cars are turning 10 years old, because we are at the tail end of a 10 mark where a lot of cars due to be scrapped within this next few years,” he said.
He also said that some workshops have decided to stop operating as an available pool of customers bringing cars for servicing has been shrinking compared to several years ago.
Aside from cost, another possible consideration for affected tenants is the layout of the new premises, which may affect consumer perception of their workshops. Consumers are more used to factory workshops than multi-storey workshops such as AutoCity, Mr Kang said.
“AutoCity is an integration between heavy and light vehicles,” he explained. “Although there are two different entrances, in terms of market positioning it may change the way people view AutoCity, because it’s (both light and) heavy vehicles clustered together. Positioning and branding-wise saloon car users may not be comfortable.”
The Urban Redevelopment Authority said redevelopment plans will be announced for the rest of the industrial estate, aside from the currently affected industrial blocks, within the next 5 years.
As for whether workshops will stay the course, it remains to be seen how many will weather the challenges that the entire industry will face in coming years.
Source : Channel NewsAsia – 15 Dec 2015