HONG SEH Motors has decided to exit the luxury car market from next month, when it stops representing Maserati cars.
In a letter sent to its customers, Alfred Tan, Hong Seh Motor’s managing director, cited a difficult industry and demanding brand principals for the decision to exit.
In his letter, he said Maserati cars “simply cannot compete with Mercedes-Benz, BMW and Porsche”.
He pointed to skyrocketing Certificate of Entitlement (COE) prices and government taxes for the decision.
“In February 2010, the COE price was $20,340 and shot to $91,000 in January 2013. In February 2013, the government raised the registration tax from 100% to 180% for cars exceeding $30,000. As a result, for a Maserati Ghibli, which costs $96,000, we have to pay to the government $263,000 for ARF, COE, GST, CEV, etc.”
Added to this, Tan said Maserati insisted on an “impressive showroom in the Leng Kee/Alexandra area which is very expensive”.
Word in the market is that the Maserati brand will be going to a known competitor. The new dealer is Tridente Automobili, newly formed by Komoco Holdings, who will launch the brand on May 19. Hong Seh lost Ferrari to ItalAuto, part of Komoco Holdings, in 2009.
Sailing Into Profitable Waters
Hong Seh will now focus on the luxury yachts market, which, to date, is not subject to prohibitive government taxes.
“We are moving into into the marine industry,” said Edward Tan, Executive Director of Hong Seh Marine. In the company’s portfolio will be Ferretti (which it has been distributing for 10 years), Riva, Pershing, and other craft.
“We will start in Singapore and spread to Southeast Asia,” said Edward.
“We are also assisting Ferretti Security & Defence with their foray into navy craft in Southeast Asia,” he added.
Edward added the company would be going into small aeroplanes, too.
“One door closes, another opens,” Edward said.
