Chia Yan Min

Mr Cher Kwang Siong has alwayshad a strong interest in cars andstarted helping out in the family au-tomotive business as a schoolboy.

But he is quick to warn that ittakes much more than passion torun a successful company.

“This is my hobby, but under-standing the business and persever-ing are more important,” says themanaging director of Kheng KengAuto, which has made its name asone of the pioneering Singaporecompanies in Africa.

Mr Cher, 48, started helping outat his father’s car repair workshop– a five-man operation in Yio ChuKang – when he was a teenager inthe 1980s.

The firm has since grown into aone-stop automotive service pro-vider with about 100 employeesworldwide. Its operations includethe import and export of cars, carscrapping services and workshoprepairs for vehicles.

Kheng Keng Auto has a presencein more than 50 countries in re-gions such as Africa, South-eastAsia and South America.

EARLY VENTURES ABROADIn its early years, the company sawstrong demand from dealers inSouth-east Asia for Singapore carsand spare parts.

“Cars in Singapore are scrappedafter a relatively short period com-pared with other countries in the re-gion, because cars are usuallyde-registered after 10 years here,”said Mr Cher, who joined the familybusiness full-time after finishing na-tional service.

“I realised that not onlySouth-east Asia, but also the wholeworld, had a strong demand forsuch cars.”

The company opened its firstoverseas branch in Malaysia in themid-1990s, began exporting cars tothe Middle East, and also startedsourcing for cars and car parts fromJapan to meet growing demand.

The idea to start shipping cars di-rectly to Africa came after Mr Cherrealised many of his cars from Singa-

pore were exported to Dubai beforebeing resold to the Kenyan market.

He flew there in 2004 to explorethe market, decided that opportuni-ties were good, and set up a branchin Nairobi, Kenya, the same year.

Africa lacks public transport infra-structure, which fuels the strong de-mand for cars, Mr Cher noted.“Once economies grow and in-comes rise, people’s first thought isto buy a car for convenience. It’s nota luxury item, but for transport.”

The company also saw growthprospects in southern Africa whereincomes were rising fast, and estab-lished a branch in Johannesburg,South Africa, in 2006 to cater tocountries in the region such as Zim-babwe, Zambia and Namibia.

AN UNFAMILIAR MARKETKheng Keng Auto was the first Sin-gaporean firm to open a car show-room in Kenya, Mr Cher said.

“At first, it was not easy. Themethod of running the business istotally different from Singapore, orthe rest of Asia,” he said.

To build brand awareness, thecompany drove fleets of eight to 10cars to small towns, sometimestravelling as far as 300km awayfrom the city.

“We might sell eight out of the 10cars while there. Or we might sellthree cars. But these roadshowsraised awareness about our compa-ny among the locals.

“For example, in the weeks afterthe roadshow they might take a busto our showroom to buy our cars,”he said.

Customers could browse throughthe company’s offerings on an on-line catalogue at Kheng Keng’sbranch in Nairobi.

However, this posed its own setof problems back in 2004.

“In the office, we set up comput-ers so that customers could see pic-tures of the cars.

“But in 2004, the (dial-up Inter-net) connection was so slow thatloading a photo could take 15 min-utes, and we had only about eightcomputers, so there would be along queue,” Mr Cher recalled.

Technology has improved since,but the firm still believes in helping

customers every step of the way –from selecting a car and getting it in-to the country, to longer-term main-tenance and spare parts.

“To be successful, we have to helpthem so they feel better about buy-ing cars from Kheng Keng,” he said.

In recent years, the company hasalso been affected by currency vola-tility. African currencies beganweakening substantially againstthe greenback in 2011, which meantthat Kheng Keng’s cars, priced inUnited States dollars, became in-creasingly expensive for locals.

“It was initially difficult for cus-tomers to accept that the same carcould become more expensive with-in a few months...

“But customers have come to real-ise that their currency fluctuates.This is a challenge of working inthis region,” he said.

FUTURE PLANSKheng Keng has beefed up its sup-ply chain to meet growing demand

from all over the world.The company started sourcing

for cars and car parts from Britainlast December and is looking to ex-pand sourcing in Europe, Mr Chersaid. This will complement its sup-plies from Japan and Singapore.

It also shifted its central logisticsnode from Singapore to Port Klangin Malaysia in August 2012, to han-dle larger volumes. Sourced prod-ucts are processed through this lo-cation before being shipped to cus-tomers or branches overseas.

“Our business needs a big spaceand a lot of manpower, both ofwhich are lacking in Singapore,”he noted.

The company also started anoth-er downstream sales channel inSharjah, part of the United ArabEmirates, in March this year.

This channel shortened shippingtimes to North Africa, and also gavethe firm more access to the MiddleEast market.

The company is now focused on

growing its business so it can hiremore talented staff, Mr Cher said.

“Even if there are opportunities,we might not be able to take advan-tage of them because we don’t haveenough staff, or enough people will-ing to travel.

“Getting Singaporeans to workoverseas is not easy, because in Sin-gapore it’s very safe and sometimesthey are not able to adapt to new en-vironments.”

It will be a while before Mr Cher,who has two sons aged 16 and four,thinks about handing the businessto the next generation as his chil-dren are still young.

However, the company is alreadytraining its second and third genera-tion of leaders.

Said Mr Cher: “I think the bestage to run this business is from thelate 30s onwards... You need atleast five to eight years to accumu-late enough experience.”

chiaym@sph.com.sg

NAME: Cher Kwang Siong

AGE: 48

JOB: Managing director of Kheng Keng Auto

BASED IN: Singapore, but travels frequently to thecompany’s locations around the world

Mr Cher Kwang Siong saw an opportunity to ship cars directly to Africa after realising that many ofhis cars from Singapore were exported to Dubai before being resold to the Kenyan market. His firm isone of the pioneering Singapore companies in Africa. PHOTO: DIOS VINCOY JR FOR THE STRAITS TIMES

Cher Kwang Siong’s company has a presencein regions like Africa, S-E Asia and S. America

1Establish a strong brand name:“Some customers import carsthrough other companies but theycome to us for parts, and we helpthem even though they didn’t buythe car from us,” he said.

“I do this to differentiate myselffrom others... to show that we’re theright ones to buy from.”

Having a strong brand name alsomeans that customers would bewilling to pay a premium, knowingthat they will receive better service,he added.

2Build up a pool of talented,adventurous staff:The company sends staff fromAfrica to its Singaporeheadquarters for training.

“We want to show them how thebusiness is run and how to keepcars in showroom condition, in linewith the standards we have here,”Mr Cher said.

The company also wants to hire“adventurous” staff willing to workoverseas and help the companyestablish itself in new markets.

Coming up with new ways tomotivate staff based overseas isalso vital, Mr Cher noted.

“The market is not as competitiveas in Asia or Europe. If you monitorand maintain your business well, itwill just run by itself and you’ll stillmake money.

“We have to make sure staff areconstantly pushed to do better... Wemight give them a share of theprofits, or another branch tomanage,” he said.

3Be prepared to take risks andmake mistakes:

In an unfamiliar market, theright business decision to makeis not always clear, Mr Cher said.

“When you go overseas, thereis no guide telling you whetheryou should turn left or right...Youhave to decide what directionyou want to take, and you needplan A, B and even C. A lot ofthings will not go the way youthought they would... Sometimesyou have to give up and useanother plan.”

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In The RafflesConversation

DIFFICULT TO PERSUADE LOCALS

GettingSingaporeanstowork overseas is noteasy, because inSingapore it’s verysafeand sometimesthey are not able toadapt to newenvironments.

’’MR CHERKWANG SIONG

C4 BUSINESS | THE STRAITS TIMES | SATURDAY, AUGUST 22, 2015 |