Zero car growth 'likely in future'CARS could become even more costly down the road.
Senior Minister of State for Transport Josephine Teo told Parliament yesterday the annual allowable vehicle growth rate is likely to go down to zero - from the 0.25 per cent today.
This is a reversal of what Transport Minister Lui Tuck Yew said in 2011. Mr Lui said then that the growth rate would not be reduced to zero, saying such an outcome would go against the aspirations of people who want to own a car.
Mrs Teo did not give an indication of when the cut would happen, merely saying it was a likelihood "in the future".
Motor traders said growth dropping from 0.25 to 0 per cent would be insignificant in the near term on the back of an imminent certificate of entitlement (COE) supply bonanza.
"But it will be glaring when COE numbers start falling again in five to six years," said Mr Ron Lim, general manager of Nissan agent Tan Chong Motor.
Against a growing resident population and rising affluence, prices are likely to climb because of growing demand for an increasingly scarce commodity.
Mrs Teo said: "As long as incomes continue to grow, it is unlikely for private car ownership to be a low-cost transport option."
Singapore Vehicle Traders Association secretary Raymond Tang said: "If it's zero growth, is it still necessary to have a COE system? It becomes a one-for- one replacement."
Some experts however, reckon car buyers need not be overly worried about the cut as it was not an immediate move and predicted it would not be a permanent move.
Mrs Teo also said during yesterday's debate on her ministry's budget that there were "no immediate plans" to smoothen the cyclical COE supply pattern by holding back some certificates in the coming bountiful years for the next dry spell. She said that it was difficult to arrive at the right number to hold back.
"The upshot is that this is not a straightforward exercise," she said.
Dr Park Byung Joon, an urban transport management expert at UniSIM, said that did not mean the Government was dismissing such a move altogether.
"It doesn't have to do it until 2017," he said. "There'll still be plenty of COEs to hold back then.
"For me, 'no immediate plans' does not mean 'no'."
Motor Traders Association president Glenn Tan said flattening the COE supply pattern was crucial for the motor industry.
"We don't want a peak-and- trough problem," he said.
"We don't want to hire and fire people. We can't cut our showrooms in half when the COE supply plunges."
Mr Tang said there should be greater clarity so that businesses and consumers can plan better.
This article was first published on Mar 12, 2015.
Get a copy of The Straits Times or go to straitstimes.com for more stories.