Upgraded C180 may impact Cat A COE

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An upgrade of the entry-level Mercedes-Benz C-Class may make the compact luxury sedan even more popular and push up the small car COE premium further.

The Mercedes-Benz C180 Kompressor with a 1.6-litre supercharged engine and five-speed automatic transmission has been one of the most successful premium models in the Category A certificate of entitlement segment for cars below 1,600cc

Together with other Continental brands which have been available with smaller engines, these previously more expensive makes are now attracting new customers with their Cat A models because the small car COE premium is lower than the Category B big car premium.

Currently, the gap is about $25,000.

In the first three months of 2012, the C180K alone racked up an impressive 409 units or 13.1 per cent of the total 3,129 Cat A passenger cars registered in the first quarter of this year. For the whole of 2011, the 927 units of C180K accounted for 8.6 per cent of the total Cat A cars registered here last year.

Observers say the C180K has been particularly successful in winning over previous owners of two-litre Japanese sedans, which have been priced out of the market by high COE premiums and the strong Japanese yen.

Now, a new engine and transmission for the baby Benz could put the squeeze on both premiums and the competition.

Due to be launched next month is the Mercedes-Benz C180 1.6 CGI with a new 1.6-litre turbocharged engine mated to a seven-speed automatic gearbox, which promise to make it smoother and more fuel-efficient.

The new C180 1.6 CGI has 156 hp and 250 Newton-metres of torque. The power is unchanged but torque has increased 20 Nm. It sprints from zero to 100 kmh in 8.5 seconds, faster than the 9.9 seconds previously.

More importantly, despite the enhanced performance, the 1.6 CGI now consumes 6.3 litres per 100 km, or an 18 per cent improvement from the 7.7 l/100 km of the C180K.

It is understood that the two versions cost virtually the same and that the difference in list prices reflect the changing COE premiums.

But the C180 1.6 CGI will not be the only luxury model to penetrate the Cat A market in the second half of 2012, when the number of Cat A COEs available is expected to shrink by a massive 40 per cent.

The new B-Class will be launched in late July, with the B200 featuring the same 1.6 CGI engine.

Next door at BMW, the accomplished 3 Series sedan with a 1.6-litre turbocharged engine and eight-speed automatic transmission is speculated to be available for booking in the second half. This model is eagerly anticipated because it will be the first Cat A version of the new 3 Series. Currently, only the BMW 1 Series has Cat A models here.

Other near-premium Continental models will be driving into the Cat A segment, too. One is the new Volkswagen Beetle with a 1.2-litre turbocharged engine. The latest version of this iconic car will be launched in mid-July.

Cat A has traditionally been the bread-and-butter segment and its COE premiums have reflected this reality by being lower than Cat B, which is mainly for luxury models.

But that may change as European carmakers begin offering small but powerful engines in their quest for increased fuel efficiency.

Car distributors in Singapore say the influx of luxury and Continental makes with smaller engines has widened automotive choice and increased the pool of potential buyers tremendously.

So even as small car COE premiums rise and force buyers of the usual bread-and-butter models to drop out of the market, they will be replaced by new buyers with stronger purchasing power.

Friday, Jun 29, 2012

The Business Times