Given his strong connection to the automotive world, Khong faced a tough decision: stay in Japan to continue refining his expertise or return to Singapore to join the family business. He chose the latter and is now the CEO of Vin’s Automotive Group, with his father serving as chairman.
When Khong returned to Singapore and joined the family business in 2014, the father-and-son duo set out to expand the company. They established an automotive sales division, specialising in the parallel import of cars, mainly from Japan, with a select few sourced from the UK and Hong Kong.
Khong brought with him the Japanese principles of Kaizen and Omotenashi, which emphasise continuous, incremental improvement and warm hospitality, respectively. These values are ingrained in Vin’s daily operations, distinguishing the group from its competitors and ensuring exceptional customer service.
The leasing business also grew with the rise of ride-hailing platforms in Singapore in 2015, prompting the group to expand its fleet and offer rentals to private hire drivers. Then, in 2018, the group launched its latest business segment — vehicle financing, providing in-house secured loans to car buyers.
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Khong says that this is a highly lucrative business, with a gross margin of around 60%. While there are some risks associated with money-lending, he is not overly concerned, as the cars serve as collateral. To date, non-performing loans account for just 0.5% of the group’s total loan book.
Freedom to steer
Khong adds that the group had opted to parallel import cars to sell instead of working with a brand principal and holding the authorised dealership title. “We buy our cars locally via an importer. This importer will source models of the cars we want from Japan. They will then manage the logistics and clear the homologation and customs necessary. It’s hassle-free for us,” says Khong, adding that these parallel importers have the economies of scale to bring the cars in at an attractive price.
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That way, the group is able to leverage its data to better plan its inventory, such as not overordering a particular model or bringing in a model that is not popular in the market.
Stepping into Vin’s sales showroom in Sin Ming, not a single sedan car was in sight. Khong explained that the group has noticed that the demand for sedans is low, so it is not the group’s focus to bring in such cars. Instead, the showroom is filled with Japanese-made SUVs and MPVs, which are larger-sized cars that are more family- and business-friendly.
Adopting the parallel import business model allows Vin’s — as compared to an authorised dealer — the freedom to pick and choose the cars they want to sell.
Furthermore, Khong adds: “For authorised dealers, they tend to have a minimum order quantity (MOQ) to sell a certain number of cars in a year. We have the freedom to have better cost control and not be exclusive to a single car brand.”
Apart from not being bound exclusively to one brand, Khong shares that brand principals usually have certain requirements from authorised dealers. The showroom must be located in a central area and of a certain size and type, which in this case is a “3S” (a single space offering a combination of sales, aftersales and service parts storage).
Vin’s, on the other hand, does not have a 3S space. Instead, its showroom and aftersales locations are located separately, allowing it better cost control on its lease.
Expansion plans
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With cost control in place, Khong intends to expand the company. To do that, the group is seeking to be listed on the Catalist board of the Singapore Exchange . This will be the bourse’s first initial public offering (IPO) this year.
The group is seeking to raise gross proceeds of $6 million by offering 20 million placement shares at 30 cents each. There will not be a public tranche. Trading of Vin’s shares on the Catalist board is expected to start at 9am on April 15. Upon listing, Vin’s shares are expected to have a market capitalisation of $39.3 million.
RHB Bank is the issue manager, full sponsor and placement agent in connection with the IPO.
Of the net proceeds to be raised of approximately $4.0 million, the group intends to spend $2 million to enhance its backend IT and services; $1.2 million to expand its showrooms, workshops and aftersales services; and $0.8 million on general working capital purposes.
While it has no formal dividend policy, the group has already announced plans to distribute 75% of its net profit after tax for FY2024 ended December 2024 to shareholders. This will be proposed at the group’s upcoming annual general meeting (AGM) in May.
The group’s expansion plans are underpinned by a resilient balance sheet and a strong net asset position of $23.3 million as at Sept 30, 2024, as well as cash and cash equivalents of $11.2 million as at Feb 28, 2025.
The group has also successfully shown consistent revenue and earnings growth since FY2021, with growth seen across all segments. The group’s largest revenue contributor is automotive sales and related services.
However, Khong shares that the segment’s gross margins are the lowest among the business segments. The business is still necessary for the group to capture cross-capture business opportunities across the supply chain.
Banking on predictive AI
Even though selling cars can seem like a bricks-and-mortar business, Khong believes there are ways to tap digital capabilities to give itself a competitive advantage. The group is planning the development of a comprehensive Enterprise Resource Planning (ERP) system integrated with AI-driven capabilities to optimise operations and improve customer experience.
Khong says: “Our ERP system will eventually consolidate the data across all of our business units. We intend to leverage business intelligence on top of this — and AI technology further down the line — to give us better insights and transform the data we have (into actionable business decisions).”
Khong gives an example of using the ERP system and the consolidated group data to support predictive pricing and better inventory management. The group intends to expand its IT team to accelerate innovation and incorporate AI-driven capabilities for predictive maintenance, dynamic pricing and inventory optimisation.
Meanwhile, the group does intend to grow its footprint, although Khong says the group’s focus will be purely on the Singapore market in the foreseeable future, unless a good opportunity arises.
Even before the IPO, the group is set to open its third showroom in Singapore this June. Located at ONE KA @ Macpherson, the new showroom spans approximately 451 sq m and will showcase both new and pre-owned vehicles to meet customer demand.
The group already operates two showrooms — Vin’s in Midview City Sin Ming and REVV at Corporation Drive; one workshop, AutoCity in Sin Ming; and an office handling accident reporting and insurance matters at Carros Centre in Kranji.
Khong is already mulling over strategic acquisitions, although no concrete plans have yet been announced. “We are keeping our options open for M&A opportunities. We will look for complementary businesses — probably something that we are not already doing, so we can leverage on new expertise,” he says, adding that post-IPO, such deals can be easier done, as the group will be able to conduct share swaps or fundraise, instead of relying solely on its cash.
Looking ahead, the group remains optimistic about its prospects. Despite Singapore being one of the most expensive countries to own a car, strong consumer demand persists, driven by the country’s robust and stable economy.
The group also sees the government’s plans to phase out internal combustion engine (ICE) cars by 2030 as an opportunity, as it stocks hybrid and electric cars.
Competition in this area is expected to remain fierce, particularly with the influx of Chinese brands into the Singapore market. Parallel importing from China would not be feasible as it only manufactures left-hand-drive vehicles. Khong is open to becoming an authorised dealer for a Chinese electric vehicle brand should the opportunity arise and align with its business interests.
