By Samuel Ee

SINGAPORE - Toyota has upped the ante in a shrinking and increasingly competitive market by offering five years of free servicing - including parts and labour - but some rivals are not about to follow suit.

In a promotion unveiled over the weekend, authorised distributor Borneo Motors Singapore will give buyers of each new Toyota five years of unlimited mileage warranty, with three models - the Prius, Camry and Wish - also receiving five years of free service. Normally, Borneo only gives free servicing for the first year or 20,000 km, whichever comes first. Other incentives include free petrol, as well as waivers on interest and GST.

While the five-year unlimited mileage warranty is not new in the market - Kia and Honda have offered such terms over the past year - the free service for half a decade is the longest so far.

"Borneo Motors Singapore aims to provide better value to our customers with long-term satisfaction throughout their car ownership experience, thus providing peace of mind," explains managing director Koh Ching Hong.

According to Mr Koh, servicing costs for a Toyota over a five-year period is worth "about $5,000 in value", adding that the average mileage is 20,000 km per year.

Among authorised distributors, the Japanese brand is the market leader and has been the top make here for eight straight years.

But Toyota's competitors appear unfazed. For example, over at the current second most popular brand, Kia, there are no plans to follow the leader for the time being. "It's like giving a discount and is part of the promotion package," says Cycle & Carriage Kia senior manager Chin Kee Min.

Kia, which introduced its own five-year unlimited mileage warranty last October, offers the first two servicings free - at 1,000 km and 5,000 km - while only labour is free for the third service at 10,000 km.

"At the moment, we feel the market is responding to an upfront price discount," says Mr Chin. "So we offer our customers a competitively priced car.

We feel this strategy is more transparent to the consumer."

The general manager of a smaller mainstream brand won't be jumping on the bandwagon either. "Demand is low, so everyone has to come up with a campaign to get people excited and draw them in," he says. "It's a gimmick."

More importantly, he says that he does not have Toyota's sales volume.

"I don't have have the numbers or margins to support something like this.

The more you sell, the more you spread out the risk. It's a numbers game," says the general manager. "If I do this, it may come back to haunt me."

The general car market has been subdued since COE premiums began soaring in early March on concern over a sharply smaller COE quota. Most prospective buyers have baulked at the higher car prices and seem to be steering clear of the showrooms for now.

This article was first published in The Business Times.