Think the $41,400 sticker price for a BMW 335i is bad? Be glad you don’t live in Singapore where the same model will run you $260,000, about what an Italian exotic would retail for in the United States.
Singapore residents who want a private vehicle must pay for a special permit that allows them to keep the car for a decade – the permit alone costs $55,000 USD, as much as a Porsche Boxster would in America. In 2008, the permit cost about $2,000. On top of that, buyers must pay a 150% duty on the vehicle upon importation. Not surprisingly, car ownership rates in Singapore sit at around 15%, compared to 82% in the United States.
Singapore is ruled by an authoritarian regime (famous for outlawing chewing gum in the name of etiquette and cleanliness), and is strongly pushing for residents to adopt mass transit as a practical solution to reduce congestion, and cut down pollution. While Singapore boasts outstanding air quality, it fears that it could become similar neighboring islands like Hong Kong, which has fewer restrictions on vehicle ownership but is riddled with heavily polluted air.
The structures in place leave car ownership as a privilege for the wealthy, and car dealers are now looking to peddle premium brands to the wealthy, since they are largely unaffected by an increase in ownership costs. “The extra $20,000 to S$30,000 on the [new vehicle permit] is nothing when the total car price is $300,000 or more,” one dealer told Bloomberg. No wonder that companies like Lamborghini do well in the tiny Asian country, with a special preview for their upcoming LP-7004 Aventador being held exclusively for that market.
[Source: Bloomberg via Zero Hedge]