Exotics and supercars are losing their appeal in affluent rich Singapore

Supercar dealers in Singapore are worried over their future as high taxes, loan restrictions and a shift in taste towards less flamboyant vehicles are hampering sales figures.

Singapore is home to the third-highest ratio of millionaires per capita - yet in contrast, supercar showrooms have been largely silent, reported Reuters. In a bid to revive their business, some dealers like Ferrari have set up a used car division while others are throwing huge launch parties for new models.

"If this situation continues, we believe that supercar dealers will not be able to sustain a viable operation based on the huge infrastructure put in place as well as the high cost of running the business," said Kevin John Chia, General Manager of Aston Martin Singapore.

Singapore might not possess a large automotive market, but its luxury car segment was, until recently, punching above its weight. Last year, the city-state was the third largest market in the world for ultra-luxurious automaker, Rolls-Royce, while Porsche is among the top 15 automakers here - something unheard of in western markets.

However, since the implementation of the new taxes and loan restrictions in March 2013, sales of some supercar brands have dived by as much as 90 percent, with reference to figures from the Land Transport Authority (LTA).

In the first half of 2014, only two Aston Martins, two Lamborghinis and 14 Ferraris were sold, compared to 16, 20 and 64 units respectively in the same period a year ago.

Last March a tiered Additional Registration Fee (ARF) structure came into effect, taxing the first $20,000 of a car's Open Market Value (OMV) at 100 percent, the next $30,000 at 140 percent, and anything above $50,000 at 180 percent.

Melvin Goh, Chairman and Chief Executive of Lamborghini distributor, EuroSports Global Ltd, cited that even affluent individuals who can still afford to buy supercars would now think twice about paying a substantially higher price for the same model.

Apparently, besides the higher prices, the issue of exclusivity is another factor why the affluent are shunning away from supercars. Over the years, supercars have become more common in Singapore, resulting in some connoisseurs to stay away from flashier brands. For example a commodities trader, who already owns three supercars, has just paid $600,000 for a BMW i8, a plug-in hybrid sports car. "I bought the BMW i8 because I don't want to be seen as driving another supercar that half the people I know have," the trader told Reuters.