Auto sales to slam the brakes as riders turn to Uber
Commercial and passenger vehicle registrations are forecast to plunge by 20% and 6.5% respectively.
Singapore’s automative sector is in for a slowdown in 2018 as the government steps up its efforts to reduce overall vehicle fleet size and citizens are increasingly turning to ride-sharing services, according to BMI Research.
Commercial vehicle (CV) registrations are projected to plunge 20% whilst public vehicle (PV) registrations are expected to dip 6.5% for the year ahead as the market contracts from its heyday recorded in 2017.
“Furthermore, the LTA has capped growth in the number of Category C COEs to 0.25% per annum, because the CV fleet size became too large in 2017. This is also in line with the Singaporean government's aim to reduce the overall size of the vehicle fleet in the country and assign greater focus on improving its public infrastructure,” the report noted, adding that a greater number of Singaporeans are also turning to ride-sharing and car rentals like Uber which effectively slashed car sales, BMI added.
Singapore’s auto sector gained momentum in 2017 as CV and PV sales rose 11.6% and 3.8% respectively thanks to low associated costs and higher availability of more Category C COEs for commercial purposes.
However, sales are poised to decelerate as BMI notes that car demand is already largely satisfied thanks to low COE premiums which buoyed the market to 3.8% growth for the previous year.
“We believe that the demand for PVs will also slow in 2018 as the market's pent-up demand is satisfied due to the historically low COE premiums in 2017, which have enticed consumers who previously adopted a wait-and-see approach when deciding whether they could afford to own a vehicle,” BMI added.
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