Tag: Automotive

You might have noticed electric commercial vehicles making rapid inroads into the local automobile industry of late, with the charge being led by companies such as BYD, Citroen and DFSK1 (Dongfeng Sokon Automobile) amongst others. Models such as the T3, e-Dispatch van and EC35 have become popular with businesses and are an increasingly common sight on the roads. Even large companies like DHL2 have switched to an eco-friendly delivery fleet, replacing their ICE (Internal Combustion Engine) vans with electric ones.

The recent presence and prevalence of electric vehicles is neither an accident nor a modern phenomenon. Electric vehicles were already available at the dawn of the automobile age, with its invention going as far back as the 1830s3 and its commercial debut in the 1890s. These days, government incentives, lowered cost of ownership and heightened social consciousness are propelling this new phase of automobile electrification further and faster than ever before.

In Singapore, the long term goal4 is to achieve 100% of vehicles running on cleaner energy by 2040, and reduce peak emission levels by 80% within the next 10 years. The road map towards this objective has already begun with the installation of infrastructure such as charging stations across the island and a raft of financial inducements such as lower road tax and incentives like the EV Early Adoption Incentive (EEAI) and Vehicular Emissions Scheme (VES). There are also campaigns to educate the public on the benefits of Electric Vehicles (EVs) and the positive effects on the environment. Though the commercial sector has been slower in adoption, even here, the paradigm shift is underway.

For businesses, the impetus for change has always had a strong correlation with costs. The cost of petrol in Singapore has always been relatively high because of import costs as well as duties which range from 66 cents to 79 cents per litre for premium petrol (RON98 and up) and ‘regular’ petrol (RON 92 and 95) respectively5. Comparing the average cost of running an ICE and EV of a similar make, EVs can be up to 4 times cheaper to run6. According to studies by the LTA (Land Transport Authority), the average annual mileage of commercial vehicles is 40,000km.

Factoring in the current fuel rate of $2.71, and an average consumption of 1 litre for every 11.5km  the annual running cost is $9,426.

40,000km / 11.5 (average L/km) x $2.71

Similarly for EVs, we consider that it can travel 6.4km per kWh, then multiply this with the current cost of $0.52 per kWh. The running cost is $3,250 annually.

40,000km / 6.4 (average kWh) x $0.52

This difference means that a savings of 65% in annual running costs is possible by replacing petrol or diesel vehicles with electric ones.

Another concern of most would-be EV owners is the availability of charging options, as well as the time needed to exchange EV batteries. Fleet managers would be worrying about whether time would be wasted searching for a suitable charging station or waiting many hours for an EV to be adequately charged. To businesses, any down time imposes an opportunity cost as these resources could have otherwise been productively deployed. In anticipation of future needs, a robust network of EV facilities and services is rapidly being set up. The current number of petrol stations stands at about 180 around the island. Planned EV charging points far outnumber this figure many times over. In HDB (Housing Development Board) estates, nearly 2,000 HDB car parks will each have a minimum of three charging points by 20259. By 2030, a total of 60,000 EV charging points are planned to be installed. A variety of different charging stations have also been installed.

Level 1 chargers

These charging points supply a 120 volt AC through a standard electrical outlet. A Level 1 EVSE (Electric Vehicle Supply Equipment) cable which uses a regular 3-pin household plug on one end for the outlet. Level 1 chargers supply between 1.4kW to 3kW and would take between 8 to 12 hours to fully charge vehicle batteries.

Level 2 chargers

Level 2 chargers supply 240 volts AC and are referred to as public charging. These require specialised equipment to set up at home. Most Level 2 chargers are found in residential areas, public parking lots, and places of work or commercial settings. A charging session generally requires 1 to 11 hours with a charging rate of 7kW to 22kW with a Type 2 connector.

Level 3  chargers

Getting a full battery from a level 3 charger is the fastest among the 3 options and can take as little as 20 minutes to 1 hour with a charging rate of 43kW to 100+kW. Level 3 chargers also require installation and offer charging through 480V AC or DC plugs. The downside is that not all EVs are equipped with the required connectors so not everyone can make use of these charging points.

Making the switch to EVs may be daunting for individuals but make perfect sense for companies with a vehicle fleet. Assuming a commercial EV has a range of 300km11 and a commercial vehicle averages a daily mileage of a distance somewhere between that of a regular driver and a Grab driver of between 200-300km12, the commercial EV only needs to recharge its batteries fully at the end of a work day. This is the perfect arrangement for vehicles that are mostly used during office hours and returned to the same location afterwards. They can then be charged up ready for use the next day.

Factoring TCO (Total Operating Costs) for EVs over ICE vehicles, makes another compelling argument. Over the 10-year period of acquiring and operating a vehicle, the TCO is lower for EVs12. How much depends on the usage whereby the cost savings become greater with higher utilisation.

Adopting EVs also has the ancillary benefit of future-proofing a company’s fleet before ICEs are inevitably made obsolete. The UNDP Global sustainability goals, to which Singapore is a party to, lists climate change and a governmental commitment to limit global warming to below 2 degrees celsius. Moving away from ICEs is listed as one of the steps to achieve this. For a company to pro-actively support these efforts, the options can range from positive brand perception to stronger brand loyalty or growing customer base.

However, this change does not come without disadvantages. Higher upfront costs to purchase a new EV is one such factor to consider. Maintenance costs, servicing or just general unfamiliarity also make it daunting to make the switch.

For those facing such reservations, a growing number of car leasing companies such as ETHOZ makes acquiring a commercial EV with confidence much easier. ETHOZ started offering EV for rent in 2021, right after Budget 2020 (on push to promote EV) was released. Renting or leasing an EV takes away the financial burden of having to fork out a large amount of cash in the beginning or taking a loan. Best of all, ETHOZ will take care of all EV-related operational and maintenance costs which are bundled as part of the monthly cost. Contact us to find out more of what we can provide you, customisation options are also available!

Having a car to use is the ultimate expression of freedom. Being able to go anywhere, at any time is a kind of independence afforded to the more mobile. Renting a car is a good way to experience this at a low cost, especially if you are overseas on a holiday or on a long-term job posting. However, it can also turn out to be an unpleasant experience if you do not understand the fine print of the contract on a comprehensive level. Do not forget to do a quick scan of the details as the fine print may result in a rude shock involving hefty fees that could have been avoided. To shed light on these hidden costs, here is a list of some of the common fees.

With its well-refined, majestic lines, a Mercedes car has always evoked desire in both drivers and passengers alike. The epitome of a superior, classy, almost aristocratic continental car, Mercedes has always been particularly adept at turning heads, from the understated elegance of an A-class to the stately S-class. However, the exclusive standing which it confers to its owners comes with a lofty price tag. Owning a Mercedes often costs more to acquire, when compared to Japanese makes of the same vehicle class. There is a premium on the cost price, servicing and repairs are likewise more expensive. A routine servicing for Mercedes under Service A and B costs between SG$250 to SG$500, while major servicing costs up to SG$1,200.

With repair expenses taking up a large proportion of the cost of owning a Mercedes, looking for a reliable Mercedes Benz servicing workshop is paramount. The difference between a trustworthy garage versus one that is not, could well be a wallet that is several thousand dollars lighter. The primary concern of all workshops is to generate profits and some may employ methods that range from the ubiquitous upselling marketing spiel to short changing customers on the services it offers.

Here are some ways that your Mercedes workshop could be overcharging you.

Topping off Fluids

Changing the engine oil is recommended for every 10,000km travelled or every 6 months, whichever is earlier. However, this rule of thumb has not kept up with advances in oil and lubrication technology. These days, engine oil can last between 10,000km to 15,000km before it has to be replenished, even for a continental car like the Mercedes which can run up to 20,000km between oil changes if synthetic oil is used. This, however, is not the main ruse. Since most cars come in on a regular basis to change the engine oil, it’s the perfect time to package the sale and refill other fluids such as coolant flushes, trans flushes, power steering flushes…. That is where the cost adds up.

It is important to recognise that the customer can choose to reject these services and if they are accepted, it is perfectly alright to request to have the empty bottles afterwards. This is to ensure that the specified genuine brand and quality of fluids are used, and that a new bottle was opened for this purpose. Otherwise, a cheaper alternative brand could be utilised or in certain cases, the leftovers from previous customers could be re-used.

Unnecessary Changes

Most people send in their Mercedes for servicing and choose between one of the three packages. However, each of these contain a predetermined list of items to replace. These include the oil filter and the air filter which may not be totally worn out yet. It is also at this point that other items such as the spark plugs, brake pads, gaskets, drive belt or even tyres are accessed and recommended for replacement.

Asking for the replaced items just to check the state of wear and whether it is appropriate to be discarded, as well as knowing some basic knowledge about car maintenance would go a long way to determine if the workshop is trying to make a little more money out of you.

Installing New Parts

Often, being informed that certain car parts have to be changed are accompanied by unpleasant warnings of what further damage could result if the same parts are not changed. Sometimes, this can be innocuous like driving with a damaged CV boot which initially manifests itself as an irritating squeaking sound when the car is driven but can result in much more serious and expensive damage. Changing the items outright is the most conservative solution but there are several other options that are much cheaper such as repairing the damaged part or sourcing for generic replacements.

How many times have drivers gone into a workshop for minor issues and been diagnosed with multiple expensive problems? It is not uncommon amongst dishonest mechanics to fabricate phantom car problems. Often, seeking a second opinion is a good way of putting one’s mind at ease as to which decision to take.

Harvesting Parts

The stories recounted read like an urban legend. When visiting an unfamiliar workshop, a dishonest mechanic could swap out your newer parts with older ones, only to sell yours at a higher price later on. Similarly, inferior parts or refurbished parts could also be installed and your newer ones taken out. A different spin on this trick is installing used parts and selling them as brand new.

Phantom Charges

Charging for work not done is one of the most egregious examples of dishonesty that can happen. This can apply to the charge for parts that were allegedly installed when none were put in and also for the labour charges on work that was not done.

The only way to avoid such scams is to visit reputable Mercedes Benz workshops or build up a relationship with a trustworthy car workshop offering Mercedes Benz services.

Overcharging

This is a little hard to justify but being aware of competitors’ rates can help with making a choice on which workshop to visit. In many instances, overcharging is most effective when you are caught in a situation without an alternative. For instance, vehicle towing services are required when there is an accident, or if roadside assistance is necessary due to a faulty battery. In this case, the driver will have no choice but to accept any brand of battery, even if the price is inflated.

At the very heart of the matter, is trust. With shady mechanics, they first confuse you, then they distress you, and finally they overcharge you. Very often, most would be none the wiser therefore, it always pays dividends over the long run when you entrust a vehicle to a dependable workshop. ETHOZ, having offered Mercedes-Benz servicing for many years, prides itself on being a credible, knowledgeable and quality-assured automotive partner. At its service centers, Mercedes-Benz owners can be assured of premium service at reasonable package rates, with even more savings and perks as a member. Its comprehensive, up to 39-point vehicle health check has the same stringent standard applied to its large fleet of vehicles that has formed a significant portion of its leasing business for over 40-years. It is this long-standing assurance of excellence provided by ETHOZ’s skilled team of automotive experts that sets every client’s mind at ease.

Interest rates are rising, COE prices are up, inflation is soaring and oil prices increases are simply merciless. For some businesses, these hit particularly hard, especially those where transportation is a main or even ancillary part of work and owning a fleet of commercial vehicles is crucial. These transportation costs comprise expenses associated with the movement of raw materials, finished goods, or retail products to customers and businesses. Direct costs such as fuel, maintenance and payroll are the primary components but also indirect costs like support vehicles and structures, distribution networks, and other overheads. Of these, the biggest problems a commercial vehicle owner would face come with the high upfront cost of building a fleet and maintenance costs. This is because either of these issues would mean a stoppage of business. Engaging a third-party company specialised in truck rental or commercial vehicle rental in Singapore would go some way towards managing these costs but otherwise, here are 5 common problems that keep commercial vehicle owners awake at night.

1. High Upfront Cost of Acquisition

As of May, 2022, COE for commercial vehicles stands at SG$51,0002, having been on a mostly steady climb for the past 1 year. Based on a brand new light commercial vehicle (LCV) such as the popular Toyota Hiace, listed at about SG$55,0004, a business owner is looking at forking out a whopping SG$106,000 on average per vehicle. This quickly multiplies when building up a fleet of vehicles. Using a commercial vehicle rental company would be a viable solution, as it frees the business owner from large front loaded cash outflows and breaks it down into smaller payments. An added benefit is that contract lengths can be customised so whether the lease duration is for a couple of months or years, it is equivalent to paying for a vehicle according to usage. This added flexibility can be liberating, especially in economic downturns where downsizing may be vital for survival or if exploring a new business venture.

2. Rising Interest Rates

Borrowers beware! The US Federal Reserve announced earlier that interest rates would be raised5 and promptly increased the Fed funds rate by 25 basis points. It was also said that interest rates would be increased 6 more times in 2022 and that 3 more were planned for 2023. This typically has a knock-on effect on borrowing rates in Singapore as well6. While leverage is one of the most common ways to finance a new or used commercial vehicle, those choosing to borrow to buy a van or truck will be offered car loan packages with ever higher interest rates with each Fed rate hike. A pertinent point to note, is that car loans come with fixed interest rates. This means that once accepted, the interest rate is locked in for the duration of the loan. This can be a good or bad thing, depending on the prevailing rising or falling interest rate environment.

3. Finding the Right Employees

Staff turnover can be a real show stopper. Without properly qualified or properly experienced staff to operate commercial vehicles such as panel vans and even larger trucks, business operations would come to a halt. Drivers need to be educated in taking care of the vehicles under their charge. Reckless driving or failure to give due care to its daily upkeep can easily diminish the life of a vehicle. Simple things like dragging gears and driving at a high RPM can put undue strain on engines. Not slowing down on uneven roads can damage vehicle suspensions too.

4. Breakdowns

Time is money to businesses, and every second lost is an opportunity cost. Breakdowns result in the vehicle being immobile and disrupts operational efficiency, resulting in loss of income.

Some of the most common causes are listed below.

Commercial Vehicle Breakdowns

Overheating can severely damage your van’s engine. It does not immediately cause your vehicle to stop working so if the driver ignores the overheating alert and keeps on driving, eventually the temperature under the hood would rise to the point where extreme heat warps the engine cylinders and pistons. Once this happens, the engine is a total loss.

A Flat or Damaged Battery causes ignition problems and malfunction of the vehicle’s electrical systems – the vehicle cannot start, or the engine starts then quickly dies, the headlights flicker amongst other signs. Although it can easily be rectified by changing the battery, it still takes some time to buy and install one.

A Faulty Alternator is related to a flat battery but much more serious is a defective alternator. Without one in working order, the battery that is used to start the vehicle and power the electrical systems will not work.

Electrical Problems come in a variety of flavours but they all spell trouble. A fatigued starter or solenoid, bad battery cable, blown electrical fuses or failed spark plugs can all cause a car to fail to start.

5. Maintenance

Maintenance costs can add up especially when managing a fleet of several vehicles. Aside from the expenses, it takes time away from its essential functions in the business. However missing servicing appointments could lead to greater mechanical problems down the road. It is a catch-22 situation that puts any business owner in a bind.

Maintaining Commercial Vehicles

Vehicle Inspections are a required part of vehicle ownership. It is a government mandated inspection regime that ensures that vehicle owners properly maintain their vehicles up to operational and emissions standards.

Servicing is a self imposed regiment that aims to mitigate potential mechanical failure and extend the service life of the vehicle. This averts the situation in which a vehicle is not repairable and lessens business disruption.

Tyre Replacement is recommended when the tyre thread reaches the minimum depth. Age, as well as usage determine if it is time to buy a new set of tyres. Using worn out or old tyres can be dangerous due to the compromise of the wheel’s structural integrity and traction.

Worn Gaskets, Seals and Valves form flexible joints between components. They prevent leakage or spills of liquids or gases. These ensure proper functioning of vehicles that may otherwise lose power or stop working altogether.

6. Benefits of Commercial Vehicle Rental

It is said that, “Amateurs hope, while professionals work”. When it comes to managing just one or even a fleet of commercial vehicles, ensuring that a company’s transportation and logistical needs can be absolutely business critical so why not leave it to the professionals to take care of it? By engaging a commercial vehicle leasing company to be in charge, there is efficient division of labour according to expertise. This is beneficial as it frees up the company from the hassle of owning commercial vehicles. Employees can be fully engaged in the principal business of the company, thereby fully utilising its manpower and maximising resources.

A commercial vehicle rental company also has the advantage of scale and related business contacts over a single owner. For example, the company that chooses to purchase its own commercial vehicle may be constrained by cost. The vehicle rental company is likely to have a larger quantity and variety of vehicles in its inventory. This gives it the ability to provide more flexibility to suit the business requirements of its clients, especially if the needs change from time to time. In this way, the leasing company can be said to be more specialised; customised to a company’s needs and requirements, and able to provide more personalised service.

Other than the daily management of the deployment of commercial vehicles, ownership also entails the burden of repair, maintenance and servicing. Fortunately this is a task that vehicle leasing companies can take on as well. With an expert team of professional automotive technicians it can easily undertake full maintenance servicing, freeing up valuable operational resources that would otherwise be needed to manage the vehicles. It truly is an absolute solution to overcoming the hassle of vehicle ownership.