Premium car brands made up 70 percent of new car sales

In the first seven months of the year, luxury and premiums brands such as BMW, Mercedes-Benz and Volvo made up 70 percent of new car sales in the small car COE segment. In the same period last year, the figure was less than 50 percent, and five years ago, it was less than one percent.

The Straits Times reported that market share of continental car brands has been growing in recent years. For instance, the best selling brand between January and July was Volkswagen, with close to 1,500 cars. Mercedes-Benz took second spot with around 1,200 sales, and BMW in third with 500.

The trend is caused by a number of factors. These brands, particularly Europeans, started down-sizing the engine capacities of their cars to meet stringent emission standards in Europe.

With COE premiums rising in the recent years, dealers for premium marques also have a bigger buffer to work with, allowing them to outbid their competitors for COEs.

The Government is currently reviewing the COE system to level the playing field for 'bread and butter' cars, such as the Japanese and Korean brands. It is expected that the changes will be implemented soon.