Financial market turmoil in Asia may change view of posh car status Auto owners are starting to shed big and beautiful

Auto industry

November 23, 1997|By BLOOMBERG NEWS

SINGAPORE -- One in six cars on the road in Singapore is a Mercedes-Benz, but that may change -- fast.

As in many parts of Asia, a posh car is seen as a key status symbol in the affluent island nation, where image-conscious Singaporeans pony up to $200,000 ($126,000 U.S.) for the cheapest new Mercedes and a head-turning Ferrari can break the bank at S$700,000.

Turmoil in Asia's financial markets may change all of that, though, as currency devaluations make swank cars more expensive and an economic slowdown cools the big spenders.

Already, the cost of Singapore luxury car permits -- sold to the highest bidder in government auctions -- has plunged to Persian Gulf war levels. In nearby Bangkok, car owners are shedding the big and the beautiful. At Seri Centre, one of the country's largest shopping malls, a secondhand Mercedes car dealership has set up shop, housing more than a 100 previously owned cars.

BMW sales have plunged 47 percent in Thailand in the first nine months of the year, compared with the same period a year ago. And that could also happen to car sales in countries such as Indonesia and the Philippines, though at a slower pace, analysts say.

In nearby Malaysia, sales of luxury cars may crash after the government raised import duties on cars in its recent budget to a maximum of three times the car's value, from two times, in a bid to slow imports and prevent a widening of the country's trade deficit.

Pub Date: 11/23/97

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