CB Analysis 2016: Greener & Leaner




Hybrids and diesels are at an all-time high, and why 2017 could see pricier COEs

 *Data cited in this article is provided by the Land Transport Authority as of December 2016. 

Singapore – We’ll get the big question out of the way first: What’s the car market going to be like in 2017? To do that we need to analyse 2016 first, and to sum that up: Not as many people bought new cars as we thought, and Singapore is still gaga over crossovers. 

On With The Old, Out With The New
The single biggest factor affecting COE prices, as it has been for the last two to three years, is vehicle age. Older vehicles nearing the 10-year Certificate of Entitlement (COE) lifespan are most likely to be de-registered, as the vast majority of car buyers would rather spend the money on a new vehicle, although there already are some indications to the contrary.

With a large percentage of the car population above seven years old, it indicates a stable level of de-registrations, which because of the Vehicle Quota System, in turns spells a steady supply of new COEs that keeps COE prices down. Cars that are nine to 10 years old make up the single biggest proportion for passenger vehicles here, age wise, with 16.5 percent (99,087) of them in this age group. The next largest is eight to nine-years, with 16.0 percent (95,996).

2015 saw 100,859 de-registrations of vehicles, while 2016 Jan to Nov sees 109,887 de-registrations. COEs are now ‘flushed’ back into the system with the quarterly COE quota revisions now, but more de-registrations don’t necessarily translate into more COEs, lower COE prices and better car sales.

“There has been some speculation that the government might actually decide to cut car population growth again, and besides this there are many other factors such as interest rates, a lacklustre economy and so on. In 2016, we can already see that some people have decided to renew their COEs instead of buying a new car,” said a sales manager for a European brand.

So in fact, it looks like things are going to remain stable for new cars sales next year, if not shrink, at least in terms of outright sales numbers.

More than 25,000 owners of old cars decided to renew their COEs instead of buying a new one 

“We can expect a lot of changes in the automotive industry in Singapore in 2017. Although hard to predict, we expect a decline in COE by roughly 10 percent,” says Axel Pannes, the managing director for BMW Group Asia. With 80,715 new cars sold here in 2016, a 10-percent dip works out to about 73,000 forecasted new car sales next year.

Ron Lim, General Manager, Sales and Marketing, Tan Chong Motor Sales, says, “Based on statistics, it would seem that 2017 will see an even bigger pool of passenger car replacement COEs being released….However given the recent pickup in the revalidation rate of COEs, we will likely see the COE pool remaining flat at its best in 2017.”

Mr Lim points out that a significant number current car owners have opted for a five-year COE, which is half the price of a regular cert at PQP, but the vehicle must be de-registered at the end of the five years.  LTA figures show that from January to October 2016, 12,931 Category A cars received new five-year COEs, while 2,393 received new 10-year COEs. Category B saw 6,184 five-year certs and 3,760 10-year certs respectively.

That’s a total of 25,271 passenger cars with new certs, which isn’t huge in the total population scheme of things, but considering 2016 saw 80,715 units total new car sales, that’s 25,000 potential buyers who no longer need to get a new car in 2017.

“One out of every three cars sold in Singapore is a SUV…”

Still Crossed Up
Those who were out buying new cars were, as in 2015, often spending their money on crossovers. Market leader Honda saw customers of the brand buying more SUVs/crossovers than of its other body types combined – this despite the presence of the very capable and very impressive new Civic sedan. May 2016 was the high point of this, when the brand registered a staggering 1,198 SUVs, in contrast to 126 hatchbacks, 254 MPVs/wagons, and just 14 sedans. The majority of the SUVs, it can be safely said, are either official model HR-V or the parallel-import Vezel – it’s almost certainly Singapore’s best-selling car of 2016.

“One out of every three cars sold in Singapore is a SUV, based on LTA data year to date,” says Mr Lim, as number three brand Nissan’s own sales figures mirrored Honda’s, with its Qashqai crossover being the brand’s mainstay model. “For Nissan, our focus on the promotion of Crossover models in Singapore has allowed us to power the brand up the sales charts. This year as of November 2016, crossovers make up 64 percent of Nissan’s car sales in Singapore.”

While it’s conceivable that people will eventually get sick of small crossovers, for 2017 it doesn’t look like that will be the case, with a whole boatload of well-designed, desirable machines in that segment due here: Opel Mokka, a new Mini Countryman, Peugeot’s newly crossover-ised 3008 and what could be another huge seller for 2017, the Toyota CH-R.


BMW’s diesel 116d was a strong seller for the German brand 

Fuel And Less Far Between
But what was truly surprising about 2016 is that, for the only the second time in Singapore’s history, the number of petrol-powered passenger cars actually went down, while the number of non-petrol powered passenger cars (diesel, petrol-electric hybrids, plug-in electric hybrids) actually went up (see chart). 

At the end of 2015, 587,900 petrol-powered cars plied our roads, while at the end of November, 580,298 cars did. This can be attributed to de-registrations and ageing vehicles of course, but the interesting bit is the flipside: Diesel-powered cars are at an all-time high, with 10,056 of them around now. That’s a big jump from 5,976 units in 2015 – it’s a 168 percent increase, and that’s thanks to the latest breed of more efficient diesel engines, many of which are already Euro VI compliant. Big diesel sellers include the BMW 116d, the Kia Carens and Sorento diesels, as well as much of Peugeot’s model range. 

The biggest brand for diesels was BMW – with 1,707 of its cars sold being diesel-powered, and it looks to continue that trend in 2017 with the base-model of its much anticipated, next-gen 5 Series slated to be the 520d. 

“Diesel sales are great for us at the moment. According to LTA numbers, 1,449 BMW diesel cars were registered from Jan – Oct 2016 and only 668 BMW diesel cars were registered in all of 2015.  To date I have received positive customer feedback on our range of diesel cars as it helps reduce fuel consumption and emissions,” says Axel Pannes. 

Petrol-electric hybrids have also hit a high, with 9,654 of them on the roads they’re not far behind diesels, and compared to the 6,371 of them running around in 2015, it’s a 152 percent increase in numbers. It’s almost certain Singapore’s best-selling hybrid is now the grey import Vezel hybrid, which is also the cheapest hybrid on sale now, and the Fit Shuttle Hybrid likely makes us the rest of the numbers. 

It proves all the excuses about not buying hybrids as tosh. Here, CEVS works together with the lower prices of parallel import cars considerably – but not to the concrete benefit of consumers. 

Here, as you approach the $100k-and-under price range, you’ll see more people willing to risk their money in search of the lowest price possible, to the detriment of everything else. 

Yet it’s not actually just a case of regular folk buying hybrids, sadly, and the proof is on the roads: Have you seen the latest Toyota Prius running around? How about the previous one? Taxis are intertwined with the discussion here, since it’s very likely you’ll have seen a Prius ferrying people around, be it as proper taxi, or a passenger car owned by a car leasing company backed by Uber or its like. Toyota registered 1,418 hybrids this year (approximately), and we’re very sure at least 1,000 private passenger hybrid cars didn’t find actual homes anywhere, but most of them are sure to be plying the streets as Uber-mobiles. 


More plug-in hybrids are drifting into Singapore in 2017

Plugging the gap 
This may be the year that plug-ins go mainstream, and the charge is being led by BMW with a whole sub-brand and model range of plug-ins under the iPerformance Automobiles moniker. 

As of November 2016, there are 125 plug-in electric hybrids registered in Singapore, that translates to a  266 percent increase over 47 units in 2014. Again, in the grand scheme of things, is almost nothing but keep in mind that plug-ins basically didn’t exist at all until five years ago, and in line with Singapore’s car technology ‘lag’, there were zero running around before 2014.

The Carbon Emissions Based Vehicle Scheme (CEVS) has allowed the initial price of greener cars to be lower, which may allow the iPA vehicles to be more competitive. 

“With the existing CEVS, we can offer some iPerformance models at similar price levels as their combustion engine counterparts. With the revised CEVS, if there are additional benefits offered to customers purchasing PHEVs, we expect to see interest grow. We also believe as the range of EVs and PHEVs grows, demand will really pick up,” adds Axel Pannes. 

Of course while the proportions are quite dramatic, the actual scale of the thing isn’t very big, but here’s the thing: The adoption of non-petrol powered cars (or at least cars that aren’t solely powered by gasoline, to be precise) is a trend that’s infiltrated even the stubbornest ‘pro-petrol’ markets, like the USA and Japan. 

From a regional perspective, more and more governments are looking at legislation that will drive customers towards hybrids. For example, in markets like Sri Lanka, it’s hard to sell anything but hybrids given the tax incentives,” says Mr Pannes.  

But it’s doubtful Singapore will get with the programme. It is, after all, the place which took eight months to approve the first plug-in hybrid for sale here, largely because the bureaucratic machinery/intelligence needed to process the idea and concept of a plug-in didn’t exist, common sense or lack thereof aside. 

“Nissan has always been a strong advocate and pioneer of EVs. However its adoption hinges a lot on local government support given its cost is still relatively high to compete effectively in the retail market,” says Mr Lim. 

Here, it’s always been the case of getting the high barriers to entry (read: cost) out of the way before anything else, plus the absence of any governmental push towards the ownership of more efficient and clean cars. CEVS is not really a discount of any sorts, fundamentally, since buyers pay for it themselves at the end of the car’s life as the CEVS amount is deducted from the rebate you get for de-registration. Even if the initial price is lower, some car buyers might actually not see CEVS as any sort of benefit and it may harm the resale value of a car if the initial ARF is low enough. 

The adoption of Euro VI emission standards by December 2017 is a positive step forward, while a renewed CEVS programme is due in June 2017, and there have been rumblings of changes to the the latter but exactly what those changes are, is anybody’s guess. The fact remains that if more eco-friendly machines which produce less local pollution don’t get any sort of help, there will always be cheaper alternatives which remain more available and appealing to the mass market. 

But despair not. Global economics being what they are, and we’ve said that Singapore can’t keep out the crush of progress no matter how hard the powers that be stick their collective heads in the (increasingly soot-filled) sand, plug-ins, hybrids and the like will eventually reach a point where they’re not just viable, but necessary. We’re all increasingly coming to the conclusion that if you want a car to drive your kids around in, it needs to be the sort of vehicle that’ll help prevent them all getting some sort of lung disease before they turn 30. 

Car Population 2006 – 2016, passenger cars by propulsion

  Total Population

Petrol

Diesel

Petrol-Electric 
Hybrid

Petrol-Electric 
Plug-In

2016*

601,852

580,298

10,059

9,654

125

2015

602,311

587,900

5,976

6,371

108

2014

616,609

605,511

3,206

5,727

47

2013

631,345

612,654

1,412

5,020

2012

617,570

609,792

681

4,684

2006

472,308

471,707

7

379


about the author

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Derryn Wong
Has a keen interest in all things mechanical, technological, animal and mineral. Is particularly fascinated by eco-cars and cars which make no logical sense. An avid motorcyclist and photographer, he also enjoys cats.