Fast Market Research recommends "Singapore Autos Report Q4 2012" from Business Monitor International, now available
Boston, MA -- (SBWIRE) -- 11/13/2012 -- Following the news that taxis will be removed from the bidding process for Certificates of Entitlement (COEs) to purchase vehicles in Singapore, BMI believes there will be little immediate positive impact on passenger car sales as the number of COEs will remain the biggest issue. The government is still on course to proactively slow the market's rate of growth over the next two to three years as cuts in the number of COEs available drive up prices.
There was a rare uptick in total vehicle registrations in July, as the Land Transport Authority reported a 1.9% increase. BMI believes this is down to consumers anticipating the lower number of COEs from August and taking the plunge to buy even an expensive COE if it means it is cheaper than the next round. As a result, total vehicle registrations for the first seven months of 2012 were down just 1.4% year-on-year (y-o-y), which is slightly ahead of our forecast for a 2.3% contraction in 2012. Similarly, passenger car sales were down 4.8%, which is also ahead of our projection for a 6.4% full-year decline.
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We will maintain these forecasts, however, as we do think July was a temporary spike and the higher prices in August will have the same dampening effect as the previous cuts in COE numbers. The small car segment has been hit hardest again, with the cost of a Category A (1.6-litre and below) COE rising 7.1% to add an average of SGD5,000 to the existing price. The smaller 4.4% increase in the price of a Category B permit, which adds around SGD4,000, is unlikely to make a significant change to the competitive landscape, where the top two brands are from the premium segment.
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