When Hong Kong’s former financial secretary Antony Leung Kam-chung announced a 150% increase in the luxury car tax (later reduced to 100%) he did so after buying a top of the range Lexus for himself, Access Asia noted.
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For this he faces possible criminal charges and is now out of government. Also, people expected luxury car sales to fall in Hong Kong given the poor economy, SARS and the new tax.
However, this appears not to be the case and the new taxes have had little effect on the top brands in the market, with Mercedes-Benz and BMW actually increasing their market share.
Mercedes-Benz reports that its share of the total private car market has increased to 11% – or 35,000 vehicles – and BMW’s share has risen to about 12.5%.
It seems it is the mid-sized market where consumers are delaying purchasing.
The term “luxury vehicle” applies to cars costing more than $HK500,000 in Hong Kong, Access Asia said.
