How businesses cope with COE spike

How businesses cope with COE spike
By Lynda Hong | Posted: 23 December 2010 2047 hrs

SINGAPORE: With COE premiums reaching 10-year highs, affected businesses are coming up with new ways to cope with the situation.

High COE premiums and high fuel costs are making those in the courier and delivery services come up with cost-effective ways of doing business.

These include buying second hand models or renting them.

WARP Logistics Trading and Services operations executive Paul Ng said: "If we buy a new vehicle, it would cost much more than we would rent for a particular month".

"(If) we have more business in a particular month, we would just rent (a vehicle) so that we won't (be burdened by extra costs) when that month is over".

Delivery companies say they may have to increase fees by 20 per cent next year to pay for rising operating expenses - especially when they have to cope with other costs like road tax, parking and ERP changes.

For moving company Astro Movers, brisk business from an improving economy does not mean fatter profits.

That's because orders were taken prior to costs going up.

Astro Movers operations manager Rashidi Mohd Noor said: "We are trying to keep our prices low for customers by absorbing most of it - like GST because the competition is very tight, so we have to keep our prices low for our valued customers".

Parallel importers have also come up with new ways to increase sales - such as sharing the cost of COE premiums with buyers.

Some dealers are resorting to selling second hand cars, as their prices are more stable.

-CNA/wk

- wong chee tat :)