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Luxury sales outpace overall car market
THE mass luxury car segment is outpacing the overall market as premium brands expand into the volume segment by offering a wider range of models with more accessible pricing.
In the first six months of the year, the biggest winners have been the big three German brands and the British.
From January to June 2017, mass luxury brands put 10,399 new cars on the road, or an 11.4 per cent increase from the same period a year ago (see table).
This is double that of the total car market, which only grew 5.4 per cent to 45,783, according to the Land Transport Authority.
As expected, the three German luxury makes - Audi, BMW and Mercedes-Benz - all chalked up year-to-date gains.
Together, the trio accounted for exactly three-quarters or 75 per cent of mass luxury registrations in the first half.
In terms of volume though, Mercedes-Benz remains the luxury juggernaut.
The brand with the three-pointed star stayed ahead not only as Singapore's most popular premium make but also the one with the biggest year-to-date growth - 674 units comprising registrations from both exclusive Merc dealer Cycle & Carriage as well as parallel importers.
In percentage terms, Maserati made the biggest gains in H1, up over 70 per cent to 60 units.
But the Italian marque's registrations are the lowest, with its sharp spike due to a combination of its low base last year and the clearance sale before the handover to a new dealer in May.
This makes Land Rover H1's biggest winner, with a 35 per cent jump in sales. The British marque registered 235 luxury SUV models, or a third more than this time a year ago.
Jaguar, which is part of the Jaguar Land Rover group, also did well, chalking up 285 units for a 16.8 per cent rise.
The growth of the premium sector is due to the introduction of premium entry-level cars - those priced less than S$160,000 - in the last two years, and this has changed the buying behaviour of consumers, explained Corinne Chua, Wearnes Automotive's general manager for Jaguar Land Rover.
"Those who used to shop in the mass market segment now have the option of considering a luxury make at an accessible price tag," she said. "Our research has shown that the entry-level premium segment has grown from 43 per cent of the whole premium market in 2014 to 59 per cent in 2016."
Ms Chua added that Land Rover has benefitted from this trend with an "engaging" product line-up which includes the Discovery Sport. Accounting for more than half of its sales, this entry-level Land Rover has "unmatched versatility with its flexible 5+2 seating configurations and close to 1,700-litres of load capacity".
Distributors like Jason Lim, general manager of authorised Porsche distributor Stuttgart Auto, also attribute the growth in the luxury segment to a combination of growing confidence in the economy and aggressive promotions to maintain market share.
"The right product at the right price will find always a buyer, just like in the property sector," said Mr Lim, pointing to the new Porsche Panamera, which was launched early this year with more equipment but at the same price.