Jan 16, 2008
Sharp rise in car numbers as fewer taken off roads
9% increase last year may lead to fewer COEs being released this year
By Christopher Tan, Senior Correspondent
THE number of cars on Singapore roads grew by a record 9 per cent last year to almost 515,000, despite Government efforts to manage growth at a far slower pace.
The increase was three times the rate prescribed by the country's COE system.
While new car sales fell by almost 9 per cent, far fewer vehicles were either scrapped or exported, leading to the record increase, the latest figures from the Land Transport Authority showed.
Just over 64,000 cars were taken off the road last year, 23 per cent fewer than in 2006.
'I would say scrapping was overdone in 2005 and 2006,' said Mr Neo Nam Heng, president of the Automotive Importers and Exporters Association.
'Today, 80 per cent of our cars are below four years old.'
'I would say scrapping was overdone in 2005 and 2006.'
MR NEO NAM HENG, president of the Automotive Importers and Exporters Association
How the numbers stack up
Last year's unusually high growth in the number of cars on the road is expected to have a profound impact on future supplies of COEs. As a result, the car industry is bracing itself for a contraction.
Mr Glenn Tan, chief executive of Subaru agent MotorImage, said: 'This year will be a tough year for the motoring industry.'
Mr Mark Choong, managing director of Toyota distributor Borneo Motors, said the supply of COEs in the last couple of years was bolstered by extra certificates the Government released with the introduction of electronic road- pricing in 1998.
'Going forward, I don't think there will be anymore of these extra COEs,' he said.
Mr Neo added that the April COE offering would include '60,000 or fewer' certificates set aside to replace vehicles expected to be scrapped or exported this year. Last year, that number reached 86,000.
In a shrunken market, motor traders expect several changes, including:
smaller and cheaper cars will lose market share, as budget buyers are edged out;
likewise, off-peak cars - low-tax cars with restricted periods of usage - will lose some shine. Their fixed tax rebate of $17,000 will become smaller in relation to the price of a car; and big cars will continue to grow in popularity.
There is however a silver lining in the cloudy forecast.
Mr Eddie Loo, managing director of used car trader and importer Car Times, said: 'I think the demand for used cars will rise.'
The used car market has been in the doldrums in recent years because of falling new car prices.