The Straits Times reported that measures to cool the car market introduced in last year's Budget have hit luxury brands the hardest, with some reporting a sales drop of more than 90 percent in the second half of last year. Ferrari, Rolls-Royce, Aston Martin and Lamborghini were among the most affected.
Sales in the second half of the year plunged by 92 percent for Ferrari, 91 percent for Rolls-Royce, 88 percent for Aston Martin, and 85 percent for Lamborghini.
The slump came on the back of two measures that rocked the industry - a tiered Additional Registration Fee (ARF) that raised the cost of a high end car by as much as $450,000, and a loan curb that capped borrowing at 50 percent of a car's purchase price, to be repaid in five years.
The tiered ARF has pushed the cost of cars like the Bentley Continental GT, Ferrari 458 and McLaren 12C to about $1 million - up from about $800,000. A Rolls-Royce Phantom now costs close to $2 million - up from $1.6 million.
Nanyang Business School lecturer, Zafar Momin, a former automotive expert with the Boston Consulting Group, said other factors could have affected the market, such as the weaker stock and property markets and looming uncertainties faced by businesses.
"While buyers of these luxury cars are not that price-sensitive, the uncertainty and risk surrounding the future returns and liquidity of their business investments may lead them to avoid splurging. However, this phenomenon could be temporary," said Mr. Momin.
Industry watchers are unsure when buyers will return but reckon new models will stir interest.
