by Sumita Sreedharan, TODAY, 11 Jan 2013
The Government currently has no plans to review the Certificate of Entitlement (COE) system for vehicles despite the surge in premiums, which hit another record for small cars earlier this week.
Transport Minister Lui Tuck Yew, however, said yesterday he has tasked the Land Transport Authority (LTA) and the Ministry of Transport (MOT) to determine if the introduction of a Carbon Emissions-based Vehicle Scheme (CEVS) this year has had an inadvertent impact on rising COE premiums.
Speaking to reporters after a visit to SMRT's Bishan Depot, Mr Lui said the Government will stick with its plan to halve the annual vehicle population growth rate to 0.5 per cent next month. About 45 per cent of households in Singapore currently own one car or more, an increase from 40 per cent in 2008, he said.
"We know that land is scarce and we use about 12 per cent of land in Singapore for roads, and hence based on the developments … we know that we have to constrain the growth of vehicles and place a lot more emphasis on the promotion of public transport," said Mr Lui.
COE premiums for small cars rose a seventh consecutive time, hitting an all-time high of S$92,100 in the bidding exercise that closed on Wednesday.
While the supply of the COEs "is certainly one of the factors that caused the increase", Mr Lui added that there are "a number of other factors" which influenced COE premiums. These include the state of the economy, people's spending power and their desire to own a car, said the minister.
Motor traders pointed to the CEV scheme which contributed to a greater demand for smaller cars, thus driving up COE premiums. The scheme, which offers rebates of up to S$20,000, encourages car owners to opt for more fuel-efficient ones which emit less carbon.
"I understand the concerns of some of the people as well as the desires and aspirations to own a car, but … 45 per cent of households already own a car and I think, during a time like this, there are always calls to place a lot more emphasis on usage, rather than ownership," said Mr Lui. "What we really need to do to is to strike a balance between ownership and usage."
Govt closely studying ideas to improve COE system
Some suggestions merit a much closer look, says Lui Tuck Yew
By Christopher Tan, The Straits Times, 11 Jan 2013
Some suggestions merit a much closer look, says Lui Tuck Yew
By Christopher Tan, The Straits Times, 11 Jan 2013
THE Government may embark on a review of the vehicle quota system, taking in the suggestions made by the public in the light of recent record-setting premiums.
Transport Minister Lui Tuck Yew said the Land Transport Authority (LTA) as well as his ministry are looking closely at "the many suggestions we receive".
But he stopped short of saying that a review of the 22-year-old system was afoot.
The Straits Times understands that the LTA has been seeking views from the motor industry on the certificate of entitlement (COE) issue in recent weeks.
The authority would not comment on this, but industry players reckoned one possible change could lie with the way COEs - required for vehicle ownership - are categorised.
Currently, car COEs are split into two: cars with engine capacity up to 1,600cc and those above 1,600cc. There have been calls for them to be regrouped according to power output or emission level instead.
This is seen to be more socially equitable, as luxury brands such as Mercedes and BMW today offer models with high-powered engines below 1,600cc.
Such models outcompete budget cars from makes such as Toyota and Hyundai, which have more modest power outputs, and thinner profit margins that curb their dealers' bidding power.
Another area it could be looking into is restricting bidding to buyers. Bidding today is done mainly by car dealers, who tend to bid aggressively to meet sales targets and then pass cost on to consumers.
Sources also said the Government could reintroduce a cap on car financing to cool buying. Car loans used to be capped at 70 per cent of the purchase price, but this limit was lifted when the Monetary Authority of Singapore liberalised vehicle financing in 2003.
Mr Lui, during a visit to SMRT's Bishan depot yesterday, said some suggestions on ways to improve the COE system "merit a much closer look", but did not go much into details.
He said the Category A premium, for cars up to 1,600cc, had "gone up significantly", and that he has asked the LTA and his ministry "to take a look at whether there is an effect of the CEVS rebate".
He was referring to the Carbon Emissions-based Vehicle Scheme (CEVS) which kicked in on Jan 1. The scheme accorded rebates of up to $20,000 for cars with low carbon dioxide emissions.
Industry observers said motor firms selling cars that qualify for CEVS rebate have extra margins to bid for COEs - one reason they cited for the record $92,100 premium for small cars in Wednesday's tender.
The minister said about 45 per cent of households already own at least one car - up from 40 per cent in 2008. How much can the proportion grow, he said, was "a difficult question", given that roads already take up 12 per cent of land space.
Asked if he would delay the halving of the annual vehicle population growth rate to 0.5 per cent, he said no. The rate will kick in from next month - a move expected to contribute to another drop in car COE supply.
He said premiums were not merely a function of supply, but also the state of the economy and the spending power of the people. He added that high vehicle prices do not raise cost of living for most Singaporeans "on a day-to-day basis".
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