Luxury Car Market in Singapore

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Luxury Car Market in Singapore

Page of Contents
Introductionpage 3
Environmental Scanpage 4
Perceptual Mappage 6
Brand Ideapage 7
Trends and Ideaspage 7
List of Referencespage 8
Appendixpage 9

Introduction

Definition
Luxury cars go beyond average, conventional cars in the sense that they provide way more than basic necessities. Luxury cars have more comfortable, spacious seats made from better materials like leather, have more tools and equipment than what is needed for the car to run, e.g., has power steering, GPS, etc., has a better performance in a sense that they go further and faster than normal cars. The cars are also constructed with more creative and elegant designs that carry their brand image and the level of prestige associated with such cars. Luxury Car Brands in Singapore

The luxury car brands in Singapore are: Audi, Mercedes-Benz, Bayerische Motoren Werke (BMW), Lexus, Porché, Infiniti, Maserati, Alpha Romeo, Land Rover, Jaguar, Mini, Chrysler, Jeep, and Volvo.

Target Market
Luxury car brands are targeting the rich, upper class in Singapore. Seeing as how a luxury car costs on average $33,709 (Mercedes-Benz), $35,542 (Lexus), $51,008 (Land Rover), etc., all prices excluding Certificate of Entitlement (COE) (at $62,301 as of May 2013), road taxes ($2386/annum for a 3,000cc car), additional registration fee (ARF), and running costs like petrol, Electronic Road Pricing (ERP) and parking fees. This will amount to around $154,115.40 just to buy a Land Rover LR4 (the lowest-priced midsize luxury SUV from the brand), not factoring in running costs.

Environmental Scan

Social
1. New Certificate of Entitlement (COE) System
The government has set the growth rate of vehicles at 0.5%. No matter the ARF, or taxes implemented by the system, it does not affect the number of cars on the road. The only thing it affects is the total amount needed to own a car. This system has brought the COE price down, but increased the ARF and amount of taxes payable. According to TREmeritus, 2013, this results in “distributors of cars in [the] luxury segment will be badly hit while the lower end segment will see bumper sales.” Technology

1. Auto Braking System
According to VolvoOwnersClub, 2007, the auto braking system is a “refined warning system that makes the car brake by itself if the driver doesn't act when a rear-end collision with a moving or stationary vehicle is imminent.” The first system was introduced in the Volvo S80, which combines radar and camera to detect any cars within 150m in front and 55m behind your car. This system has already been implemented in brands like Volvo, Audi, BMW, Lexus, Chrysler, etc., and has helped to “cut down on the number of car crashes” according to USAToday, 2011. 2. Cruise Control

Cruise Control is a system that enables drivers to set the speed of the car and then allow the car to constantly accelerate at that speed without having to press down on the accelerator. This caters to drivers who find driving a chore, though it is more suited to long, more empty roads than congested ones. As Singapore roads are mainly crowded and short, owners of luxury cars do not use this function often, lest on expressways during off-peak hours. Then again, the roads are usually only a few minutes long and there is a lot of stop-traffic.

Economy

1. Global Luxury Car Crisis
There was a recent “double-dip recession” around the world, meaning there was little or no recovery from the previous financial crises. This resulted in luxury carmakers such as BMW and Mercedes-Benz taking a big hit, according to Examiner, 2012. The hardest hit markets were Europe and USA, with China, Asia and Russia still making sales, but not huge profits. The luxury car market is now not making profits and seeing decline. This could make luxury cars more affordable for the affluent in Singapore.

Environmental

1. Asphalt Dangers
Asphalt found in luxury car models like “Audi's A6...
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