To spread car ownership more evenly, the government is considering levying a surcharge on individuals who wish to own more than one car.
Engine power could also be factored into the categorisation of cars under the Certificate of Entitlement (COE) system.
Transport Minister Lui Tuck Yew spoke about these suggestions when he visited the site of the upcoming Marina Coastal Expressway on Thursday.
The current COE categories are based on engine capacity.
Traditionally, mass-market cars (small cars of 1,600cc and below) are in Category A.
But the car industry has evolved, and now higher end options are also in that category.
Such luxury cars took up about a third of Category A registrations last year, compared to just 7 percent in 2010.
Mr Lui said: "Models such as Mercedes C180 Kompressor and Audi A1 have an open market value and engine power that is significantly higher than those of more mass-market models such as Toyota Corolla Altis and Honda City.
"While this is a reflection of increasing affluence and consumer preferences, we also want to make sure that Category A, which is intended for buyers of smaller budget cars, retains its original purpose."
Hence, to better delineate Category A, engine power - which determines the performance of the car - could be used as an additional criterion.
Honorary Secretary of the Singapore Vehicle Traders Association Raymond Tang said that categorising COE on engine power alone will be fairer to buyers from the middle income groups.
He said: "Cars, for instance MPVs, Honda Stream, Toyota Wish, they are in Category B because of their cc (cubic centimetres).
"But in terms of their horse power and in terms of (buyers), it should be for those lower and middle income people. So if they are in Category B, it causes a stress to them, because they are challenging those 'big boys'."
Another option is to have an individual who wants to own a second car or more, fork out more cash upfront on top of COE.
Mr Lui said: "I am open to considering sensible options that could possibly take the form of, for example, levying a surcharge for the second, third or more cars owned by the same individual.
"The rationale would be that in exchange for the privilege of owning several cars, these owners should pay proportionately more by way of levies."
Mr Lui acknowledged that there are downsides to such a policy.
For example, some owners could circumvent the rule by registering the car in the name of a relative or family member.
If implemented, the surcharge will not apply to existing multiple-car owners. Commercial vehicles and motorcycles will also not be affected.
The public and industry players will be consulted on the proposed changes, before a decision is made later this year.
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Changes to the COE system has been long overdue, especially now that the luxurious brands are spreading its range of cars into the Cat A sector. With less than 10% in 2010, luxurious brands now cover close to half of Cat A bidders. That is a big cause for concern as Cat A is supposedly catered for less budget car buyers.
Another change is charging extra for individuals owning more than one vehicle. Well, if he/she is rich enough to own more than one car, what is this extra cost to him?
The road has gotten bumpier for electric cars.
Coda Automotive, one of what had been a promising crop of electric car startups, filed for bankruptcy protection this month, and said it would reorganize around the electric storage market.
High-end electric car maker Fisker Automotive, which has had financial woes for months, announced meanwhile it was laying off 75 percent of its workforce, raising the prospect of defaulting on US government loans.
Electric cars are still coming to market from luxury maker Tesla, and from major automakers such as General Motors, Nissan and others, but the outlook has become murkier.
Analysts are divided on the outlook, but few believe President Barack Obama's goal of getting one million electric cars on the market by 2015 will be met.
"It's not like people are clamouring for these vehicles," said Rebecca Lindland, analyst with Rebel Three Media, and member of a committee studying barriers to electric cars for the National Academy of Sciences.
Lindland said her view that Americans "just don't see how an electric car can fit into their lifestyle. We continue to be risk-averse in investing in new technology in our cars."
Mike VanNieuwkuyk of the research firm JD Power & Associates said more people are aware of the electric cars on the market "but there is still a low number of consumers who say they would purchase an electric car."
A report by JD Power and its partner LMC Automotive found battery-powered vehicles' share of US auto sales was just 0.08 percent in 2012, and predicts this will reach only 0.47 percent by 2015.
Only about three percent in the survey said their next vehicle would likely have a battery-electric powertrain.
VanNieuwkuyk said consumers are held back by a lack of plug-in charging stations, concerns about the range of the vehicle before it needs recharging, and especially the high cost.
At the same time, the analyst said, gasoline-powered cars "are improving enough to meet the needs of the consumer," without the price tag of electric cars.
Jason Kavanagh, engineering editor at the research firm Edmunds.com said recent surveys suggest pure electric vehicles are unlikely to get past one percent of the US market, even by 2040.
The lack of range and long recharging times are key factors.
"Sitting around for eight hours waiting for your (Nissan) Leaf to charge up is not exactly a selling point," he said.
More importantly, said Kavanagh, is that the US electric power system cannot support large numbers of electric vehicles which need constant charging.
"The US power grid is not capable of supporting that," he told AFP. "You would need a multitude of small nuclear power stations to support that recharging."
Chevrolet cut production of its Volt last year amid soft demand, and is reported to be working on a less expensive version. Toyota and Honda also scaled back plans for all-electric vehicles for the US market.
Chrysler chief executive Sergio Marchionne said recently the company stands to lose $10,000 on every battery-powered Fiat 500 it sells in California.
There are a few bright spots, however.
Tesla Motors posted its first-ever quarterly profit, of $11 million in the first quarter as revenues rose 83 percent from the prior quarter.
Tesla is banking on its Model S, which sells for upwards of $60,000, by offering special financing and leasing deals with a guaranteed resale price. The car, which has an estimated range of more than 200 miles (320 kilometres), was given a top rating by Consumer Reports.
Nissan has boosted sales of its all-electric Leaf to over 5,000 in the first quarter, overtaking the Chevrolet Volt, which has seen sales sputter.
Brett Smith, analyst at the University of Michigan's Centre for Automotive Research, said he is not surprised by the slow progress in the electric car market.
"There was enormous electric vehicle hype," he said. "In a way that was good because it helped push the technology."
Smith said it is clear that battery-powered cars "are not a near-term mainstream product" but still believes in the value of the technology.
"There is a pretty good chance something positive will come out of this," Smith told AFP.
"Whether or not we get a cost-competitive electric vehicle in the next 10 years, the good news is there is lot of development which crosses over to other vehicles."
Kavanagh of Edmunds.com said beneficiary of the trend will likely be hybrids, which use both gasoline and electric power, and charge during driving.
"We're going to see a big jump in hybrids, which can take advantage of the infrastructure we have," he said.
Kavanagh said he expects hybrids may become more attractive in the coming years "because they will become more capable in range and more cost-effective."
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As always, the disadvantages of electric cars continue to plaque its practicality on real environments and it is putting a strain on car makers, questioning them hard on how are they going to find solutions for them. Right now, there is none.
The parking crunch at Tanjong Katong Road has been eased after URA expanded parking space in the area. This is in response to requests for more parking lots to be provided.
The expanded Tanjong Katong Road car park is temporary as the space is on vacant state land, which is being reserved for future development.
Previously, the car park had 75 lots. Another 51 lots have been added, bringing the total number of lots to 126.
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Some added lots to ease the parking problems of driving food hunters. Indeed, finding a space to park the car is a pain in this area, ended up many resort to parking illegally and jamming up the roads.
Certificate of Entitlement (COE) prices for vehicles closed mixed on Wednesday in the first bidding exercise for May.
The COE for smaller cars continued to rise, surpassing that for bigger cars.
The COE premium for small cars rose S$502 to end at S$62,999, while that for the Open Category also increased by S$301 to S$62,301.
However, the premium for big cars above 1,600cc dropped to S$61,700, down S$300.
Meanwhile, the COE price for commercial vehicles fell S$1,451 to end at S$57,051.
For motorcycles, the premium dipped S$91 to S$1,700.
Since the car loan restrictions came into effect in February, COE prices have been generally on a downward trend.
Car dealers Channel NewsAsia spoke with said premiums are expected to dip further in the next bidding exercise.
Cobin Ng, manager of Leco Automobile, said: "(They) should drop further because it's back to the shorter week, two-week bidding. So hopefully (they) could drop another 5-10 per cent."
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No big surprises here with the small changes in COE premiums. Shall wait till the 60 days is over before anticipating anything big.
As night begins to give way to dawn, 40 high-performance cars pull up on an empty Hong Kong backstreet. While the city sleeps, their revving engines fill the air with a heavy smell of petrol.
The drivers huddle together to set the route, always at the last possible minute. One of them spots the red and blue glare of police lights and they scramble to their cars, regrouping a few miles away to continue the race.
By day, Eva is a nurse. For one night each week she is also an illegal street racer -- one of hundreds in Hong Kong who are bound by their addiction to breakneck speed.
With the engine of her black Mitsubishi Lancer Evolution VII modified to generate maximum power, the 25-year old is only the second woman to join an illicit club whose members include teachers, businessmen, lawyers, and even a Taoist priest.
Most of them would not even cross a pedestrian walkway on a red light in the day -- jaywalking is an offence in Hong Kong -- but the rules of a normally ordered city are put to one side in this twilight world of street racing.
Tearing along public roads at speeds of up to 200 kilometres (124 miles) per hour, Eva is fiercely proud of her secret identity as an illegal racer -- one that she never plans to reveal to her parents.
"They cannot imagine what racing is because I'm a girl and I'm a little girl in their eyes... So I will not tell my parents. I don't want to bother them."
While illegal street racing is a global phenomenon, rife in cities from Los Angeles to Sydney and Kuala Lumpur, in Hong Kong it is as much about being part of a racing community as it is a battle on the road.
"Every day we do the same thing, the same time. And then suddenly we can have our time to drive together," says Alex, 27, who has been racing for four years.
Blazing down a clear road normally clogged with traffic unleashes the tension of living in an overcrowded city, he explains.
All other cars are obstacles "when you're driving at 250 kilometres an hour", the jewellery trader says.
"All of them are walls. I'm the one who can win, win the road... I'm king of the road."
Alex didn't overtake anyone on this particular morning, after noticing an unmarked police car following friends ahead, but drove at more than 200 kilometres per hour on a road where the speed limit is 70.
"A dangerous, selfish act"
The potentially devastating consequences of racing are far from the minds of the drivers comparing cars after the "morning drive" -- the seemingly innocuous term they use to describe breaking the rules of the road.
"When I'm driving very fast, I feel I've combined with the car. The car is part of my body. I am in control," says one 36-year-old, even though like most racers she knows at least one person who has had an accident while speeding.
Hong Kong police said there are no figures on injuries caused by illegal racing and there have been no related deaths in recent years, but stress that one fatal case would be one too many.
"Road racing is a highly dangerous and selfish act that puts other members of the public in severe danger... What we want to try and do is to make sure that the road is safe," Inspector Ngai Chun-yip, who heads the illegal road racing unit in the northern territories of Hong Kong, told AFP.
Last year there was an eight percent rise in the number of illegal racing complaints compared to the year before. Ngai led 291 anti-racing operations, increasingly using online videos uploaded by racers to help track them down.
Richard was one of the 1,700 people prosecuted in the crackdown.
Back at the winding road where he was caught speeding, he points at the bushes in which police rigged speed cameras. After 120 hours of community service and losing his driving license for a year, the 41-year-old says he rarely races anymore.
"If I really want to drive fast, maybe I will go to China (and use) the racing track. But not on the roads in Hong Kong."
He added that if arrested again he may face jail and would lose his job as an English tutor.
Police describe racing in the city as an ad-hoc rather than a large-scale or well-organised activity. The racers gathered for breakfast paint a different picture.
Morning or midnight races take place every week in several different parts of the territory, while there are also more spontaneous contests when drivers eye a willing competitor on the street or simply take a chance to rip down highways alone.
Beneath the racing community's camaraderie lurks an undeniable sense of the status that cars and racing bring.
"There are too many rich people in Hong Kong. All my friends race, all own sports cars. Most of it is to show off," says Nick, who owns a Porsche and a Ford Focus rs500.
With the cost of cars and modifications -- faster wheels and engines or louder exhausts -- running into hundreds of thousands of dollars, it's an expensive as well as a risky way to make a mark.
Amateur racers have long been lobbying for an official race track in Hong Kong which they claim will stop people racing illegally on the streets.
Some already cross the border into mainland China to use a circuit where two races over a weekend can cost as much as US$10,000.
Others admit a track will never replace the thrill of racing on public roads. "You cannot match the excitement," says Nick. "Some people will always race on the streets."
(All racers' names have been changed.)
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So it's all real, those HK films in the 1990s namely The Legend of Speed and Full Throttle. Street racing do exist in a congested city like Hong Kong. While it may sound cool and exciting, and every speed lover will be eager to take up the challenge of maneuvering those the public roads in high speeds, but the consequences often happen to be fatal. It's good to hear there hasn't been any fatalities in these illegal races for the past few years, but why risk it?
Reckless and not needed. Leave such "racing" to the tracks and not on the public roads. It is endangering everyone's life.
Certificate of Entitlement (COE) prices for vehicles ended lower in all but two categories in the latest bidding exercise on Wednesday.
The COE premium for small cars ended higher, bucking the downward trend seen in the previous bidding rounds.
The premium for cars up to 1,600cc had seen a downward trend since the government's moves to rein in car loans kicked in on 26 February.
But on Wednesday, the premium rose 2.4 per cent or S$1,468 to end at S$62,497, exceeding the COE price for big cars which slid from S$67,010 a fortnight ago to end at S$62,000, a fall of 7.5 per cent or S$5,010.
COE price in the Open Category also dropped, from S$66,989 to S$62,000 - a fall of S$4,989 or 7.5 per cent.
Meanwhile the COE price for commercial vehicles rose S$2,491 or 4.4 per cent to S$58,502.
For motorcycles, the premium dipped S$21 or 1.2 per cent to around S$1,791.
Raymond Tang, honorary secretary of Singapore Vehicle Traders Association, said: "The premium for small cars has gone up, but it's not significant. I think it's quite stable now.
"The next moment that we have to see is: how are they going to restructure the COE categories. Maybe there might be some changes...then we might see some changes in the premiums."
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Once again, Cat A is higher than Cat B and Open Cat, which isn't the usual case. It has been noted by bidders that there has been an increase in quota in the bigger cars, possibly due to more of them being scrapped.
The increased ARF must be hitting the bigger cars quite badly that even the rich are going for the smaller models albeit still in the luxurious brands like the 316i, C180 n the various VW models.
Certificate of Entitlement (COE) premiums for vehicles mostly decreased at the end of the latest bidding exercise today, with Category A prices falling to the lowest since July last year.
COE premiums for small cars (1,600cc and below) continued to drop and closed at 4.95 per cent lower at S$61,029, compared with S$64,209 in the previous bidding exercise.
Premiums for big cars (1,601cc and above) decreased by 9.32 per cent from S$73,900 to S$67,010.
In the Open category, where COEs can be used for any vehicle type but end up mainly for cars, the premium decreased by 8.61 per cent to S$66,989.
The COE premium for commercial vehicles – the only category to rise – increased by 3.51 per cent to S$56,011, while the premium for two-wheelers decreased by 5.08 per cent to S$1,812.
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Premiums are getting less crazier with each bidding. Maybe it will hit the minimums just before the 60-day period ends when most car buyers will choose to go for the more affordable second hand cars with a more relaxed loan policy.
Used car dealers saw a surge in visitor numbers to their showrooms, after the MAS announced on Friday that loan restrictions on some used cars would be suspended for 60 days from April 6.
Following feedback from the Singapore Vehicle Traders Association, the Monetary Authority of Singapore (MAS) lifted temporarily its curbs on vehicles that were in stock or acquired before February 25, when the restrictions were announced.
The MAS curbs limit car loans to no more than 60 per cent of the purchase price and a tenure of not more than five years for vehicles with an open market value (OMV) of S$20,000 or less. When the OMV is more than S$20,000, a tighter limit of 50 per cent will be imposed.
To buy, or not to buy.
That was the question on the minds of those who went shopping for a second-hand car at showrooms in Ubi on Saturday.
But they have only up till 4 June to make up their minds.
A man at a showroom said the 60-day reprieve is a good time "to look around" while another potential buyer said "there is a window for us to do it, so we better do it as fast, as soon as possible".
The temporary lifting of restrictions is good news for second-hand car dealers who saw a drop in demand for their vehicles since the curbs were rolled out.
Eric Liew, general manager of Fugen Automobile, said: "I believe that in this short term, the measure will really help our business. I think more people are already coming in, looking at the cars right now."
But car dealers predict sales would not pick up until the third week, as consumers wait out for discounts.
Some dealers are considering offering discounts of up to 5 per cent for small cars and up to 10 per cent for big cars during the 60-day window.
They believe small second-hand cars will be popular among buyers.
Once the 60-day period is up, some dealers say they will scale down their business.
Fugen Automobile's Eric Liew said: "Looking forward, I would say that it's really very uncertain. Because after these 60 days, it will be back to the restrictions, and then we can foresee that most probably it'll become a very big slowdown."
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Is 5-10% discount enough to entice potential buyers to pounce? This weekend will be like Chinatown during Chinese New Year period for the second hand car showrooms. The buyers will be like sharks circling their prey, going around and having a look at their potential purchase.
The waiting game begins, and the dealers better give much more attractive packages right now than to start massive slashes to their prices as the 60-day period nears the end.
Current restrictions on car loans for the purchase of used cars will be temporarily lifted from 6 April for 60 days.
This applies to used cars that were part of car dealers' inventory before the restrictions were introduced on 25 February 2013.
In a statement, the Monetary Authority of Singapore (MAS) said used cars registered under the Land Transport Authority's Temporary Transfer Scheme (TTS) as of 4 March 2013 will be eligible for this concession.
MAS said the pool of used cars registered under the TTS as of 4 March 2013 comprises less than 7,000 cars.
MAS said it expects that much of this inventory can be cleared within a period of 60 days. After this, the financial restrictions will apply.
MAS said it has taken into account feedback from the Singapore Vehicle Traders Association (SVTA) on the state of the used car industry.
It said it would not be possible to relieve the industry from the impact of the financing restrictions on an on-going basis.
It said the two-month relaxation of the rules for the pre-existing used car inventory will help the industry adjust to the new conditions.
SVTA's honorary secretary Raymond Tang said: "The Singapore Vehicle Traders Association has held dialogues with them, and let them understand the situation of the market and also to let them know how the market has been working.
"We have appealed to them several times. We felt it might be better if they can do other things, maybe including improving the quantum of the car loans percentage.
"To some consumers, if they need a car, there is a breathing room of two months to go into the used car market and purchase.”
But some dealers are still cautious.
One told Channel NewsAsia that the 60-day period is short to gauge the effectiveness of the move.
They said a period of six months to a year is more ideal.
Matthias Goh, a second-hand car dealer at Juzt Carz, said: "It's still good news, we can try to clear as much stock as possible because with MAS announcing this, people might want to bring back the idea of buying another car.
"But that's for the next couple of months, but after that we will not know what the future will be like. It's very difficult for us to say but definitely good news for us right now."
MAS said it will continue to monitor developments in the car market and Certificate of Entitlement (COE) premiums. It will recalibrate the financing restrictions for new and used cars when appropriate.
Meanwhile motor vehicle and residential property loan restrictions will be extended to licensed moneylenders from 6 April, said a statement from the Ministry of Law. It said a new licence condition was issued to moneylenders on Friday.
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What an unexpected turn of events, but temporary though. This crucial 60 days shall be a life line for the second hand car dealers. It will be a battle between them and the buyers, to see who is the more desperate one. And if bargaining trends don't change, buyers will take this chance to snatch a good price when nearing the deadline of 60 days.
Dealers on the other hand, this is probably their final chance to clear their inventory and "chop" the buyers before they scale down their business, or even close shop altogether. So to buyers, beware if they promise you a super package of warranty and such, 'cause they might no longer be running a business after this 60 days is over. If anything goes wrong, you might have nobody to fall back on to claim anything.
Across the street where showrooms are selling the new cars, this period will be a super lull one for them since the loan curbs will continue to apply to them. So we shall see some very interesting COE bidding prices with possibly less people buying new cars.
That being said, I urge all car buyers to do your finances wisely and do not overstretch yourself taking 100% loan amount and maximum repayment period. Buy what you need and can afford.
