Tax hikes on top-end motorbikes dismay dealers, buyers
SINGAPORE — Some luxury motorbike dealers set about reviewing prices on Tuesday (Feb 21) following the newly announced tax hikes on costlier bikes, while potential buyers responded to the hikes with dismay.
Delivering the Budget statement, Finance Minister Heng Swee Keat had announced that costlier bikes, which are gaining in popularity, would be taxed more heavily under a new tiered Additional Registration Fee (ARF) system.
Under the changes, which take effect from Wednesday’s Certificate of Entitlement (COE) bidding exercise, the 15 per cent ARF rate will stay for motorbikes with an open market value (OMV) of up to S$5,000.
But two new tiers will kick in: The subsequent S$5,000 of a motorcycle’s OMV, for example, will incur a 50 per cent ARF.
Mr Eric Ng, manager of motorcycle retailer Wing Fuat Trading, said for Class 2A bikes (below 400cc) with an OMV of S$8,000 to S$10,000, the difference in ARF after the new system kicks in could be S$1,050 to S$1,750 more.
The director of motorcycle dealer A S Phoon, Mr Wilson Phoon, said that luxury bikes that cost more than S$30,000 would subsequently cost “easily S$5,000 to S$10,000” more.
A salesman at a luxury bike maker, who did not want to be named because he cannot speak to the press, said that up to 30 per cent of its customer base comprises “blue-collar” buyers, and that the changes to the ARF could shrink its customer base.
Another salesperson from a European luxury bike brand, who also requested anonymity, said about seven in 10 of its customers are average-income earners, who would “need some time to think” about the new rates. The prices of bikes at his firm have been suspended until management updates the price list in the coming days.
When TODAY visited Harley-Davidson’s Alexandra Road showroom on Tuesday, a notice said its prices would be revised in light of the announcement, and current prices are based on COEs obtained before Wednesday’s bidding exercise.
Dealers said prices would likely be revised upwards as the ARF is priced into the listed prices. Keeping prices the same while the ARF goes up would eat into the bottomline.
Mr Phoon said some consumers could move on to smaller bikes, and distributors here could look into the possibility of importing cheaper and smaller bikes.
But Mr Ng begged to differ, saying that buyers who are used to a bike’s capacity are unlikely to change since “it’s two different products”.
Mr Kevin Liew, 27, had initially planned to upgrade his five-year-old Ducati 848 to a new Ducati Panigale this year, but would consider lower-cost options instead. The marketing manager said the bike would now cost an estimated S$50,000 to S$60,000, up from about S$40,000.
Civil servant Noor Iman, 29, who rides a BMW GS, said he would not change his bike every two years, as he used to.
With the new ARF, his S$51,000 bike would cost about S$74,000 now. “That’s a whole lot of difference,” he added.