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THE number of parallel imported cars bounced back in 2014 as the certificate of entitlement (COE) quota rose and the Japanese yen fell, with the industry expecting 2015 to continue improving.
Parallel imports (PIs) are cars that are not brought in by authorised distributors and last year, a total of 1,944 units were registered, or 6.7 per cent of the total of 28,932 new cars registered.
2014's PI performance is close to 2011 levels, when the COE quota began contracting sharply.
It also means that the PI market share has bounced back from a nine-year low of 5.2 per cent in 2013, thanks to gradually expanding certificate of entitlement (COE) quotas.
"More COEs translate into more sales, so in general, 2015 should be good for the PI industry too," said the managing director of a large and well-known PI company.
The MD said that the shift back to Japanese brands could strengthen further this year with the lower yen. The currency has slipped nearly 10 per cent against the Singapore dollar in the past 12 months. A year ago, 100 yen cost around S$1.250 to S$1.260. It fell to S$1.100 late last year and today, the exchange rate is hovering between S$1.135 and S$1.140.
"The currency advantage will push sales of Japanese PI cars," said the MD. "Of course, the euro is also low now, but in terms of absolute value, a Japanese mass market car will still be cheaper than a luxury German car, especially when a bigger COE supply causes COE premiums to drop."
When the COE supply was low in 2011, 2012 and to a certain extent, 2013, German luxury models such as the BMW 5 Series and Mercedes-Benz E-Class ruled the PI industry.
But in 2014, the top three PI cars were all Toyotas, albeit slightly more expensive MPV and SUV models. The fourth most popular PI model is also Japanese - the COE Category A Honda Vezel - while No 5 is the E-Class.
Overall, the Toyota brand's commanding lead can be seen by the 1,056 PI units registered in 2014, which was three times that of its nearest rival, Mercedes-Benz with 361 units.
In the wider market including official imports, the Japanese brand was also Singapore's favourite make in 2014, with 5,431 new cars registered for an 18.8 per cent market share.
Mercedes-Benz and BMW were second and third overall respectively.