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Borneo Motors Reportedly Cutting Commissions By Up To $350/Car While Raising Sales Targets

According to sales executives who spoke on condition of anonymity to The Straits Times, Toyota authorised dealer Borneo Motors has plans to cut sales commissions while raising sales targets.

Borneo Motors, which distributes Toyota, Lexus, and Hino vehicles in Singapore, allegedly proposed to “cut commissions by $100 to $350 per car”.

A sales executive who spoke to The Straits Times shared that if the change was implemented, their monthly income will “easily” fall by $2,000.

A sales staff’s average income is said to be between $6,000 to $8,000 a month.

Another sales executive said that the commission cut was “supposed to have taken effect last month, but it did not”.

The commission cut is said to be a first for the company, according to two previous managing directors.

The Straits Times also found out that the Ministry of Manpower (MOM) had received a request from the Singapore Manual & Mercantile Workers’ Union to “conciliate a dispute involving its sales consultant members and Borneo Motors (Singapore) over a proposed cut in commission and an increase in sales quota”.

The conciliation process is said to be ongoing, and an MOM spokesperson shared that “both union and Borneo Motors’ management are engaging actively in the conciliation process.”

“Progress has been made on some issues but more work needs to be done on remaining issues where parties’ positions differ.”

Borneo Motors managing director Jasmmine Wong added that they are “in the midst of discussions which [they] have every two years”.

We have up to the end of the year to reach a conclusion. Nothing has been decided.

She added that sales staff actually wanted “higher commissions and lower targets”, and asserted that this request was “not feasible” in a time when vehicle registrations are falling.

“My priority is to keep jobs.”

According to a Fitch Solutions reported released last November, new vehicle registrations are expected to “worsen sharply” from an 11% contraction in 2018 to 20.1% in 2019.

Vehicle sales have even been predicted to contract at an annual average rate of 25.4% over 2020-2021 before “[hitting] rock bottom in 2021”.

Earlier this month, Nissan agent Tan Chong Motor announced its decision to close its Bukit Timah showroom “because of the shrinking number of walk-in customers”.

However, Borneo Motors is said to be one of the top profit generators under the Inchcape Group, and even attained a Triple Crown award from Toyota for industry-leading sales.

This is not the first time that Borneo Motors is in the news for staff-related matters.

In 2017, a mass exodus from the firm was reported after a “shock retrenchment exercise” in January that year.

Those who left were senior managers who had been appointed to replace those who were previously laid off.

Borneo Motors declined to comment then, but according to observers of the situation, “the retrenchment had created unhappiness because staff are now expected to do much more with fewer resources”.

The transfer of expatriates from Inchcape’s London office to Singapore soon after the retrenchment exercise was also listed as another potential cause for the worsened morale.

Added Mr Paul Heng, founder and managing director of NeXT Career Consulting Group on the matter: “Because of changes in working style and culture, some people may find that they are no longer keen to continue as they are not aligned with the new culture.”

 

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