BRG Group, an independent distributor of luxury cars in the grey market, is gearing up for expansion of sales outlets and service centres in metropolitan areas despite unfavourable market sentiment.
Executive director Chollathorn Sriratanaprapas said the company is looking to build a sixth location in Nonthaburi's Bang Yai district at a cost of 300 million baht next year.
BRG operates five outlets and service centres, including two new locations in Chaeng Wattana and Sutthisan, which cost a combined 100 million baht. The new locations just started operations, joining its stores in Ramkhamhaeng, Srinakarin and Phuket.
The company closed its outlet in Ratchayothin, worth 110 million baht, saying that traffic congestion caused by construction of the Dark Green Line from Mor Chit to Saphan Mai had driven away visitors and potential buyers.
But Ms Chollathorn said existing BRG outlets and service centres are now capable of supporting not only its 1,000 active customers, but also 8,000 former customers who bought luxury cars from the company.
"We expect after-sales services will generate 120 million baht worth of revenue this year, increasing to 150 million next year," she said, adding that BRG's service units are also set to serve other luxury vehicles in the market.
For BRG's import cars business, Ms Chollathorn said the company is highly likely to see a sales contraction for the fourth consecutive year thanks to overall poor market sentiment.
BRG has been one of the leading car importers in the country for 38 years. Its sales peaked at 800 units in 2012, but dropped to 500 units last year. It has only sold 350 units so far this year.
"The market seems to be caught in a downturn, but I am confident that each car importer has to adjust themselves to recover their businesses as soon as possible," said Ms Chollathorn. "Moreover, imported car offerings have to become more diverse than those offered by authorised distributors."
Somsak Sriratanaprapas, chairman of the Independent Car Importer and Distributor Association and Ms Chollathorn's father, forecast sales in the grey market would remain poor, reaching about 5,000 units this year, compared with 5,000-6,000 in previous years.
He said the market has encountered more aggressive competition from authorised dealers and tougher government regulations, both in regards to customs and testing emissions, before delivery to buyers.
During 2010-12, the grey market recorded sales of 10,000-12,000 units before hitting several snags, including higher import taxes and a refusal by European car makers such as Mercedes-Benz and BMW to provide after-sales service.