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Economic uncertainty hits super luxury car sector
THE slowdown in the super high-end segment has been exacerbated by the recent turmoil in the stock market, with some dealers unable to sell even a single car in an entire month.
Almost everyone appears to have been hit hard by the growing economic uncertainty - the apparent exception is Ferrari.
The brand with the prancing horse was able to register two cars in September and four cars in August, according to data from the Land Transport Authority.
Ferrari's total tally for the first nine months of the year is 37 units, which includes both official and parallel imports.
But the other brands in its price range have not been as lucky. Rolls-Royce registered no cars in September and one unit the preceding month. However, its year-to-date registrations are still strong compared with 2014 - 17 units, including grey imports.
Lamborghini registered two units both in September and August but none in July, for a year-to-date total of 16 units.
McLaren and Aston Martin had none in August and July but managed one registration each in September. Both brands have also registered a total of four units each so far in 2015. To be fair though, McLaren and Aston Martin had been, to a certain extent, affected by questions over their representation here. Wearnes Automotive, which had clinched the McLaren franchise in 2011, gave it up earlier this year and the British sports car marque is now with the Eurokars Group.
But Wearnes made up for it by acquiring the Aston Martin brand last month from the two men who had represented it for 21 years here - Derek McCully and SK Djeng.
Another important point to note is that the registration of a high-end car does not necessarily take place in the same month as when it was ordered because of stock or customisation issues.
Nevertheless, one sales manager says that whichever way the numbers are sliced, there is no doubt that the bottom has fallen out of the high-end market for now. "Only Ferrari is moving because of the 488's newness and lower pricing," he adds.
According to him, demand for ultra high-end cars were first hit by the vehicle financing restrictions imposed in February 2013.
But he added that the increasingly gloomy economic outlook and the recent stock market gyrations have heightened the already poor sentiment.
"In the last quarter, I sold only two cars. There are no takers for anything costing above S$1 million,'' he lamented. For used cars, the figure is "anything above S$600,000''.
"The economy is slowing down very fast, with a double whammy of low oil and commodity prices. Would you commit S$300,000 in cash for a car or keep it in the bank,'' he asked, referring to what would be the mandatory 50 per cent cash downpayment.
According to the director of a luxury German brand, even "mainstream'' luxury models have not been spared either.
"The 50 per cent rule and five-year loan period have changed buying patterns,'' said the director. "Owners are now keeping their cars longer.''
Still, he expects the effect to be less acute than for the very high-end segment.
He said: "Super sports models are dream cars; they are very closely linked to economic and financial health.''