Mercedes bucks Oct trend with rise in registrations

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Published November 12, 2008

Mercedes bucks Oct trend with rise in registrations

Deliveries rise 8.9% compared with Sept; BMW's down 39.9%, Lexus's down 28.8%

By SAMUEL EE


MERCEDES-BENZ was the only premium make to register an increase in car registrations during Black October, when free-falling stock prices caused the new car market to decelerate hard.

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E200 Kompressor NGT: A Cycle & Carriage manager says October's volume was boosted by a good number of E-Class NGT cars, which are factory-fitted to run on either petrol or compressed natural gas. This is a relatively new segment because of its bi-fuel capabilities

The brand with the three-pointed star seems to have best withstood the immediate impact of the economic crisis on the car industry. Last month, it posted an 8.9 per cent rise in the number of cars delivered compared with September.

By contrast, Mercedes-Benz's competitors experienced a decline. BMW's October numbers were 39.9 per cent lower than the preceding month, Lexus's were down 28.8 per cent and Audi's were down 12.6 per cent. The data relates to cars registered by members of the Motor Traders Association of Singapore (MTA), a grouping of authorised distributors.

October was a particularly difficult month for all in the motor trade - not just luxury marques. Distributors reported slow sales amid weak sentiment caused by the current economic situation.

Overall, the MTA's total October registrations shrank from September's 6,107 cars to just 5,131 units - the lowest monthly figure for the year.

Even unusually low premiums for certificates of entitlement (COE) could not spur buying interest.

Two COE bidding exercises ago, the premium for a Category B COE for bigger and more expensive cars had plunged by almost half to $7,589 - before that, the only time Cat B had slipped below the $10,000 level was in February 2007 when it was $6,002.

Dealers followed up with price cuts of up to $4,000 for their Cat B models but unlike in the past, there was no big rush by bargain hunters. Last week, during the most recent COE tender, Cat B inched up slightly to $8,301 but still remained well below $10,000.

A manager with Cycle & Carriage, the exclusive dealer for Mercedes-Benz, said October's volume was boosted by a good number of E-Class NGT cars, which are factory-fitted to run on either petrol or compressed natural gas (CNG).

'We sold 40 NGT cars. This is a relatively new segment for us because of its bi-fuel capabilities,' he said.

Also key to last month's performance was C&C's Great Journeys Promotion, where customers of the brand with the three-pointed star select a combination of gifts worth up to $10,000, including accessories, grooming sessions and service, used car trade-in and petrol vouchers.

The manager added: 'With this mega promotion, a $174,000 E-Class Avantgarde only costs $164,000. And when the COE fell below $10,000, we also gave away free COEs. So we had a lot of attractive goodies to offer our customers a good-value proposition and maintain their interest despite the weak market last month.'

At Lexus, a source said registration volume would have been 'much higher' if not for the fact that its latest petrol-electric hybrid model, the GS450h, is still being homologated. Deliveries of the luxury sedan are expected to start later this month.

But one auto executive called the overall dip in registrations 'not unusual' because October is traditionally a slow month.

'October is usually the second slowest month for the car industry as a whole, after February and August, due to the Chinese New Year and Hungry Ghost festival. So the fall in numbers coming after September was expected,' he said.

But whether demand will spike up again with the usual year-end festive season is still in doubt. Most in the luxury segment agree that the economic fallout will hurt bookings.

A senior executive at a high-end dealership said: 'We always aim to hit our monthly sales targets but we have to be realistic. If the whole market goes down, our sales will also go down. The only difference we can make is to outsell our competition. That requires more creativity and effort.'


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