Luxury Car Sales in Singapore Decline Sharply
Luxury car sales in Singapore have taken a significant hit, with a dramatic drop in demand observed in early 2024. This downturn comes in the wake of stricter government measures, including tax hikes and heightened scrutiny of buyers, following a large-scale money laundering investigation. Industry data reveals that sales of new Bentley, Ferrari, Jaguar, and Rolls-Royce vehicles in the city-state plummeted by as much as 75% compared to the previous year, signaling a significant shift in the market.
This decline is largely attributed to a cautious approach among affluent buyers, particularly those from China, who historically made up a significant portion of the high-end car market. The authorities’ seizure of numerous luxury vehicles linked to the money-laundering probe, which implicated individuals from China’s Fujian province, further solidified this shift.
“Most of the luxury cars bought in recent years were by Chinese customers,” stated Anson Lee, Managing Director of Euro Performance Asia, a dealership specializing in high-end vehicles. “Following the scandal, you are now seeing the market stagnate. I still have Chinese customers, but they want to keep a low profile, so the whole market has slowed down.”
Electric Vehicles See Surge in Popularity
As the luxury car market contracts, the demand for electric vehicles (EVs) has surged. Chinese automaker BYD, which entered the Singaporean market in 2020, has quickly risen to become the city-state’s second top-selling car brand. BYD’s sales soared to 6,191 units in 2024, representing a fourfold increase. Tesla sales, while starting from a lower base, more than doubled to 2,384.
Luxury Brands Face Steep Declines
Luxury brands have experienced pronounced declines. New Rolls-Royce sales fell from 95 to 23. Ferrari sales dropped from 97 to 29, Jaguar’s numbers nearly halved to 27, and Bentley saw sales decline from 58 to 25. While Bentley attributed its slowdown to the transition between older and newer models, other luxury brands declined to comment.
Government Action and Market Impact
Singapore has carefully cultivated its image as a leading asset and wealth management hub, attracting substantial investment in recent years. However, this success has also exposed the city-state to certain risks. The money-laundering case, which was first uncovered two years ago, led authorities to seize 77 luxury vehicles. The cars seized included a red Rolls-Royce Dawn, a black Rolls-Royce Cullinan, a red Porsche 911 Targa, and a white Toyota Alphard, with a combined estimated value of S$4.7 million (US$3.5 million).
In response to the scandal, Singapore’s government has mandated stricter checks on financing sources for high-value purchases by luxury car dealers, property agents, and gemstone sellers, as reported by the Financial Times. “We have [always had] to do our due diligence on customers, but this has become more sensitive because of the money-laundering case,” Lee noted.
Adding to the downward pressure on luxury car sales, many of the confiscated vehicles have been reintroduced to the market. Recently, Singapore’s Justice Minister, K. Shanmugam, confirmed that the government has already sold 33 of the seized cars.
Tax Increases and Certificate of Entitlement Costs
The decline in luxury car sales has also been exacerbated by a tax increase introduced in 2023 that was designed to cool the post-pandemic market. Taxes on cars priced above S$80,000 were raised to 320% from 220%, combined with measures that limit resale value. Furthermore, buyers are facing higher costs for certificates of entitlement (COEs), which are a prerequisite for purchasing a vehicle. The COE price for high-performance cars currently stands at just under S$117,000, although this is down from a peak of S$150,000 in November 2023, reflecting the dwindling demand for top-end vehicles.
