Car loan curbs continue to hit retail sales

SINGAPORE - Slower car sales once again dragged down overall retail figures across Singapore in December, though signs are emerging that vehicle sales are picking up. Car loan restrictions introduced by the Government in February last year cooled sales.

Overall retail sales fell 5.5 per cent in December over a year earlier, the Department of Statistics said on Friday.

Motor vehicle retailers reported a 32 per cent tumble in sales that month from a year earlier.

If motor vehicles sales were stripped out, retail sales edged up 0.3 per cent, it added.

UOB economist Francis Tan noted that apart from May last year, motor vehicle sales have seen a drop since February last year.

Even then, May "was not that fantastic" as sales rose only 3.5 per cent year on year.

"We can see the financing measures from the Monetary Authority of Singapore did bite," he said.

But there are significant signs of hope for car retailers.

Car sales jumped 17.4 per cent in December from November, lifting overall retail sales by 2.3 per cent month on month.

If motor vehicles were excluded, overall retail sales would have eased 0.1 per cent month on month.

Some of the better-performing retails included sellers of medical goods and toiletries, petrol stations and department stores. Their takings rose between 3.9 per cent and 8.4 per cent in year-on-year terms.

Most other retailers also rang up more sales in December over a year earlier, it said.

But sellers of watches and jewellery, telecoms apparatus and computers, and furniture and household equipment recorded weaker sales.

Their revenue fell between 5.1 per cent and 6.3 per cent in December, year on year.

Sales of food and beverage services rose 1.9 per cent in December year on year, but they dipped 0.2 per cent month on month.

For the entire year of 2013, overall retail sales fell 5 per cent, compared with 2012.

Overall car sales fell 26.2 per cent from 2012, Mr Tan noted, adding this is one of the worst in recent years, apart from 2010, which was caused by rising certificate of entitlement premiums.

If car sales were stripped out for the full year, retail sales went up 1 per cent, noted Mr Tan.

Another bright spot came from department stores, which saw sales grow 3.8 per cent last year, compared with 2012.

Mr Tan said: "There is quite strong consumption demand by locals. The economy is growing quite well, and workers generally saw an increase in real median wages. With income growth and a low unemployment rate, department store retail spending remained strong."

The second reason is strong tourist arrivals here, he added.

The picture will be brighter this year, said Mr Tan.

"Retail sales are expected to grow 3.5 per cent this year, partially due to the low base effect in 2013, helped by continuing growth in Singapore's economy."

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