2013-12-25 21:31:38 - New Transportation market report from Business Monitor International: "Singapore Autos Report Q1 2014"
The COE system has been refined to take into account feedback from the recent public consultation exercise, during which BMI too gave its own take on the possible tweaks, which could be administered to an imperfect system (see 'COE: Possible Solutions To Tweak An Imperfect System', July 23). The revision now sees Category A having an additional criterion (besides having an engine of 1,600cc and below), the engine power must also not exceed 97kW. If a car's engine is smaller than or equal to 1,600cc but its power exceeds 97kW, it will fall under Category B in the new system.
Through this move, the government hopes to drive down Category A COE prices in the long term as demand from the
premium segment is removed. With this change being formally implemented in February 2014, to give time for the industry to adapt, we believe this regulatory development will have certain implications for the market.
Full Report Details at
* Luxury And Mass Market Segment Fortunes Could Reverse In 2014
* Category B COE Prices Will Increase
* Fuel-Efficiency May Be Compromised
COE Price Outlook
COE prices were down across all categories in November 2013 (1st bidding) versus October 2013 (2nd bidding). However, Category B prices remain elevated when compared to the period before September 2013 when the additional COE criterion) came in. This is because buyers who intend to buy cars that fall under Category B are jumping into the market now in anticipation of Category B COE prices rising after February 2014 due to the re-classification of engine power bringing additional demand from Category A over to Category B.
Over the 2013-2017 period, we forecast passenger car sales growth rates to remain lacklustre for the next two years before picking up in 2015 as a slew of COEs get de-registered, which will free-up additional supply in the market.
A healthy pipeline of infrastructure projects, will support CV sales in the coming years and similar to cars, sales of CVs will pick up in 2017, as more owners, which are facing expired COEs, come back into the market.
Motorbike sales are on track to hit our bullish 2013 sales growth forecast of 11.0%, to 11,015 units, with 10M13 sales coming in at 9,655 units. Motorbike sales have enjoyed a resurgence in the past few years at the expense of declining car sales. While small car COE prices have soared from 2010-2013 and crossed SGD90,000 (US$72,500), motorbike COE prices are still at an affordable SGD$1,710 (US$1,380). Also, with lower maintenances costs for a motorbike compared with a car in all aspects - from the insurance, to the road tax, to the fuel consumption - it is not hard to see why consumers who are considering a car purchase might decide to own a bike instead.
Due to the paucity of car COEs until at least 2015, we expect motorbike sales to continue growing at a healthy pace over the next two years. We have upgraded our 2014 and 2015 motorbike sales growth forecast to 4.0% and 5.0% respectively, from 3.0% previously.
Report Table of Contents:
BMI Industry View
- Business Environment
- Table: November 2013 COE Results (1st Bidding)
- Table: Sales Of Top Ranked Brands From January-October 2013
- Table: Singapore Automotive Sector Registered Vehicles: Historical Data And Forecasts (CBUs)
- Household Leverage Is A Risk...
- But The Overall Picture Is More Sanguine
- Higher Returns On External Assets Will Provide A Boost
- Near Term Growth Prospects Muted, But Stronger Growth On The Horizon
- Table: Singapore - Economic Activity
Industry Risk/Reward Ratings
- Asia Pacific - Risk/Reward Ratings
- Table: Autos Risk/Reward Ratings Asia-Pacific
- Company Monitor - Mazda
- Table: Selected Asia Pacific Countries' Vehicle Sales, September 2013 And Full-Year 2013 (CBUs)
Global Industry Overview
- Demographic Outlook
- Table: Singapore's Population By Age Group, 1990-2020 ('000)
- Table: Singapore's Population By Age Group, 1990-2020 (% of total)
- Table: Singapore's Key Population Ratios, 1990-2020
- Table: Singapore's Rural And Urban Population, 1990-2020
- Industry Forecasts
- Sector-Specific Methodology
- Risk/Reward Ratings Methodology
- Table: Automotive Risk/Reward Ratings Indicators And Weighting Of Indicators
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