Mitsubishi to stop selling cars in Singapore in 2024 due to new rules

SINGAPORE - Sales of Mitsubishi cars in Singapore will be suspended in 2024 because of a revised emissions scheme that applies from Jan 1, The Straits Times has learnt.

The development will not affect existing owners, who will continue to be supported by multi-franchise motor group Cycle & Carriage (C&C), which represents the brand.

C&C’s spokesperson said the move to suspend sales of new cars was driven by the change in the vehicle testing requirement and the enhanced Vehicular Emissions Scheme (VES). Both take effect on Jan 1, 2024.

The Mitsubishi showroom in Alexandra Road was devoid of cars on display when ST visited on the afternoon of Dec 27.

In 2025, C&C expects to bring Mitsubishi back with new models that would fare better under these regulations, starting with a new Outlander sports utility vehicle (SUV). Exact details of this model have not been made public.

Registrations of Mitsubishi cars in Singapore fell from 3,632 units in 2016 to 238 in 2022. It will end 2023 with just 61 units.

Mitsubishi’s global footprint has also been shrinking. In 2020, the brand withdrew from Britain. In October 2023, it announced it was stopping production in China.

The brand produced slightly more than one million cars in 2022, compared with 1.5 million in 2018, before Covid-19-related disruptions affected operations.

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Mr Arj Pillay Kulasegaram, 48, who has retired from running a racing team full-time, said that while the temporary suspension of Mitsubishi sales here was a sad development, he has lost interest in the brand since production of the Lancer Evolution stopped in 2016. This was a four-wheel-drive, turbocharged car favoured by motorsports fans.

Between 1999 and 2022, he owned seven Mitsubishi cars. All but one were Evolutions. Most of them were used in Kallang carpark rallies organised by the Singapore Motor Sports Association.

From January, Singapore will adopt the Worldwide Harmonised Light Vehicles Test Procedure (WLTP) as the sole testing standard for new private cars and taxis sold here.

WLTP is a stricter test which is said to provide more realistic emission results through a better representation of real-world driving performance.

C&C said it does not have the official WLTP results for Mitsubishi cars.

It estimates models such as the Outlander, a two-litre, seven-seat SUV, would fare worse under the revised VES, adding at least $15,000 to the cost of the vehicle.

The VES sets thresholds for five vehicular emission pollutants, including carbon dioxide, hydrocarbons and carbon monoxide.

Based on the car’s worst-performing pollutant, it will be categorised into one of five VES bands: A1, A2, B (or neutral), C1 and C2. All pollutant thresholds are being tightened from 2024.

Buyers may enjoy a rebate if their cars are more eco-friendly, or fork out a surcharge for more pollutive vehicles.

The amount of tax rebate or penalty will remain unchanged for all bands except A2.

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Vehicles under this band – including high-powered electric vehicles, most hybrids and smaller, more efficient internal-combustion-engine cars – will get $5,000 in rebates in 2024, instead of the current $15,000.

The tougher standards, coupled with the adoption of the WLTP, will push some car models into less preferable VES bands in 2024, driving up their costs. For example, if a model is downgraded from Band A2 in 2023 to the neutral band in 2024, it will not get the $5,000 rebate.

Checks with various dealerships showed that mass-market models such as the Mazda 2 and Mazda 3 sedans and Nissan Qashqai, a compact SUV, will be downgraded in 2024 to the neutral band from Band A2, as will premium options such as the BMW 116i and 216i Gran Coupe.

Parallel-imported cars undergo a slightly different Land Transport Authority approval process from cars offered by authorised distributors. Unlike officially supplied cars, parallel importers do not have access to test results supplied by manufacturers from abroad, which will apply to all units of the same model. Therefore, their cars are tested physically.

This can produce different results. For example, the parallel-imported, non-hybrid Honda Vezel in 2023 is in Band A2, while the identical Honda HR-V sold by the distributor is in the neutral band.

Mr Neo Nam Heng, adviser to the Automobile Importer and Exporter Association, said the non-hybrid Honda Vezel will drop to the neutral band in 2024. This will put it in the same band as the Honda HR-V.

Two BMW models – the 318i and 420i – will move from Band B into C1, which comes with a $15,000 surcharge, in 2024. The Peugeot 3008 and 5008 and Suzuki Jimny are also similarly affected, moving from the neutral band in 2023 to Band C1 in 2024, according to the respective distributors.

The Volvo XC60 SUV will drop to the lowest Band C2 from C1. This will draw the largest surcharge of $25,000 in 2024.

Eight motor dealers representing mass-market and premium brands told ST they believe higher vehicle costs stemming from the VES changes will not affect car prices significantly in 2024.

Most said this will be cushioned by an anticipated drop in certificate of entitlement (COE) premiums.

An increased supply of COEs for tender in 2024, and reduced VES incentives weakening traders’ ability to bid, are expected to cause COE prices to fall.

Two dealers made the point that given that the VES changes affect various models in different ways, some cars may be dropped in favour of those that will fare better under the scheme.

This article was first published in The Straits Times. Permission required for reproduction.