India's top automaker Tata Motors unveiled a new version of what was once billed as the world's cheapest car Wednesday, in a bid to reverse a slump in sales.
The jellybean-shaped Nano, which sold for around $2,200 when its first edition went on the market in 2009, has seen sales drop by more than 27 percent in the last year and Tata's recently-retired supremo admitted the car had an image problem.
The compressed natural gas(CNG)-fuelled version of the Nano unveiled on Wednesday is expected to hit showrooms within the next 90 days, the company said.
Tata Motors did not disclose the CNG Nano price, but said it would be announced soon.
"This (CNG) is the first major variant for the Nano since its launch," auto analyst Mahantesh Sabarad of Fortune Equity Brokers said.
Sabarad said the CNG version is being introduced to "give customers a better choice" but may take away its "affordability" tag.
It was not immediately clear whether the Nano would retain its title as the world's cheapest car.
In an interview shortly before his retirement last December, the company's long-time chairman Ratan Tata said it had been a mistake to market the Nano merely on its low-price, saying "various stigmas have been attached to it".
Sales of the part-plastic Nano fell 27.7 percent in the fiscal year to March 2013, to 53,847 units, according to company data.
Since its launch, the Nano has had several small makeovers -- including upgrades to its interior and a doubling of the warranty to four years.
The unveiling of the CNG Nano -- called E-Max -- was part of a mega launch by Tata Motors at its factory in Pune where it also introduced new versions of its existing Nano, the hatchback Indica and Sumo sport-utility vehicles.
The enhanced Nano -- with features like remote locking and sleeker interiors -- will cost upward of 150,000 rupees ($2,580).
In recent quarters, Tata Motors' earnings have been boosted by the performance of its luxury brands Jaguar and Land Rover, which have compensated for its weak domestic car sales.
Automakers in India have witnessed an unprecedented seven straight months of lower car sales, due to a slowing economy and a rise in the cost of raw material.
In May, Tata Motors' total domestic passenger vehicle sales fell 45.69 percent at 11,134 units, from levels a year earlier.
"The market has been bad in the past two months but since then there has been some improvements," managing director Karl Slym told reporters on Wednesday, according to the Press Trust of India agency.
Tata Motors bought Jaguar and Land Rover from Ford Motor Co in 2008 for $2.3 billion as part of plans to expand its reach beyond Asia.
The deal vaulted Tata Motors from a commercial vehicle and small-car maker into a global player whose portfolio includes luxury brands.
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So, having a cheap price is not all it takes to sell a car successfully. Consumers nowadays have grown out of this pricing affair thingy. Right now, value for money is the way to go. It is better to pay a little more to enjoy the simple luxuries in the car. Tata is fast to learn their mistakes and is good that action has been taken to rectify it. Not all car making companies learn from their mistakes so readily. Tata is commendable.
Certificate of Entitlement (COE) prices rose across the board for all categories.
In the latest bidding exercise, the COE price for the open category experienced the biggest jump -- rising by S$7,001 to hit S$83,001.
The next biggest jump was in the big cars category, with premiums going up by S$6,751 to S$81,751.
The premium for small cars went up S$2,602 to S$69,903.
COE prices for commercial vehicles rose S$1,012 to hit S$59,001.
As for motorcycles, the COE price went up by S$11 to reach S$1,712.
From next month, the government will start imposing registration surcharges on cars with high carbon emissions under the new Carbon Emissions-Based Vehicle Scheme (CEVS).
Buyers of such cars will have to cough up between S$5,000 and S$20,000.
Motor traders said car buyers who wish to avoid the penalties are driving up COE prices in the latest bidding round.
Neo Tiam Ting, president of the Singapore Vehicle Traders Association, said: "The CEVS come in not only for Category B vehicles but for all vehicles, but Cat B vehicles will be affected more. Those in Cat B, those with high-capacity cars will be affected more, that's why the COE goes up more than A."
Motor traders said higher prices for big cars are also due to the perception that authorities will be fine-tuning the categorisation of COEs to further segregate higher-end models from cheaper ones.
Eddie Loo, managing director of CarTimes Automobile, said: "After the re-categorisation, I think it will put much more pressure on Cat B. So I think for the luxury cars, premiums will still be going up. Before they reach S$100,000, I think it is better to go into the market first."
The public has until July 7 to give their suggestions on ways to refine the COE system.
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New rulings are forcing everyone to jump into the market now causing a relatively huge jump in premiums across the board. The Cat B buyers will be experiencing very high premiums until the rulings are finally in place. For now, let the figures rise.
Most used-car dealers and small motor firms Channel NewsAsia spoke to are not jumping on the car leasing bandwagon, despite bigger players getting in on the act since the authorities imposed borrowing limits on vehicle purchases.
They cite high costs of running a leasing business and unfamiliarity with how to do it as reasons.
Still, a few are eyeing the business model as an alternative to car sales.
Car leasing schemes are a mid-point between short-term rental and ownership, where you typically hold on to a vehicle for over a year and pay a monthly fee to use it.
The car goes back to the leasing company after that.
Not being stuck with a depreciating asset like a vehicle has drawn people to the scheme, plus the fact that a sizeable downpayment isn't needed.
The government's imposition of loan curbs means buyers have to foot a minimum 40 per cent downpayment for vehicle purchases.
Observers have noted that car leasing is one way of beating the curbs. Others call it an option.
Eddie Ho, general manager of Sime Darby Services, said: "It's not a way to beat the government's system but it's just another alternative for motorists to consider, because there's no way we can beat the system.
"Ultimately, leasing...to me is like another dish on the menu for the companies to sell."
Not all motor firms are keen on leasing, since much of the onus falls on the leasing company to keep leased vehicles in order.
Many companies simply don't have the resources to do it.
Still, some plan to capitalise on the opportunity.
CarTimes Automobile plans to starts a leasing arm in June 2013 while Yong Lee Seng Motor has been dabbling with leasing for around three years.
Raymond Tang, Yong Lee Seng's director, said: "The difficulty of doing it is that a lot of follow-up, a lot of support you need to give to these consumers. Or else, the consumers will not be happy...what happens if the car breaks down in the middle of the night? You must have workshop support."
Observers note that the government's "car-cooling" measures have shifted more attention to the leasing business, although it has been around in Singapore for over a decade.
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A way to beat the system for aspiring "car owners". You can have a car but save the hassle of 100% owning the car. It's a viable option if one is unable to fork out the huge downpayment needed according to the new ruling by MAS.
About 69 per cent of used cars eligible for full loans have been sold as of 27 May since authorities lifted borrowing limits for buying those cars for 60 days.
This concession will last till Tuesday.
Motor firms are bracing for uncertainty thereafter.
Dealers whom Channel NewsAsia spoke with expect the market to be even quieter, with car loan curbs in full force.
To help used car dealers clear old stock acquired before new borrowing restrictions were introduced, a two-month concession was given. This meant that buyers could continue taking up to 100 per cent loan for vehicle purchases.
The concession applied to some 7,000 used cars. Over 4,800 have been sold so far.
Classic Credit had around 180 vehicles from old stock. About 170 have been sold, but customers remain cautious.
Andy Ong, sales consultant at Classic Credit, said: "It all depends, you see, on the customer preference - what they want. Because mostly for used cars, they are going for those budget cars. Talking about high-end, they should rather go for the new cars right? Because those people are those well-to-do families."
Prospective car buyer Clarence Pang said: "Actually, I'm just checking out the cars, just looking at the value… maybe if the price is good, (I will) get it, or if not, just hold on."
Freddie Yap, also a prospective car buyer, said: "I will never, ever sign any papers to buy a vehicle over S$100,000."
Dealers are not expecting things to get any better, especially when car loan curbs for used cars kick in.
Companies have been downsizing operations or have moved out entirely, due to slowing business. Yet, others will see opportunity.
Taking up empty spaces are commercial vehicle sellers as they are unaffected by loan curbs.
Kenson Goh, sales executive at Car Design, said: "Most car dealerships will actually shrink. From maybe about four fronts to maybe about one or two fronts only. So definitely, a lot of people are cutting costs."
To ease the situation, the Singapore Vehicle Traders Association hopes authorities can raise borrowing limits from 60 to 80 per cent. It said this will reduce downpayment obstacles preventing some from buying a car.
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In a blink of an eye, 60 days is almost up, and 69% of the stock have been cleared. There are still a good 2000 of them unsold as of now I guess, so if you're still pondering on your second hand car purchase, I guess it's about time you head down and see if there's anything worth your dough.
The dealers should be slashing the prices or they might never be able to offload these 31% sitting in the showroom. The next COE bidding will be more interesting.
The Land Transport Authority said it will require SMRT to carry out more stringent checks and replace the running rails earlier where necessary.
It issued a statement following the fourth incident of a rail crack that has occurred on the North-South/East-West Line in recent weeks.
LTA said it is concerned and is investigating the root causes of the incidents.
During a joint news conference by the LTA and SMRT to address the issue of rail cracks, SMRT said that it has completed ultrasound checks on all rail joints in the system, and no other defects have been found.
As some of the cracks are symptoms of an ageing rail network, more may be expected in the future. However, LTA said safety of passengers will not be compromised.
Deputy chief executive of the LTA, Chua Chong Kheng, said: "This is because the signalling system that we have is designed to detect rail cracks, and when the rail cracks, it will be treated as though the track is occupied. Therefore, other trains are prevented or not allowed to come in to that area."
LTA added that it is too early at this stage to determine if there is any underlying link or systemic issues that contributed to these four recent rail cracks.
LTA also said SMRT, which operates the North-South/East-West Line, has a system of running rail replacement similar to the approach adopted by operators in other cities -- whereby individual running rail segments are replaced when there are defects, or when the wear and tear for that rail segment warrants it.
But due to the recent incidents, SMRT will be taking various precautionary measures. These include accelerating its rail replacement programme.
Lee Ling Wee, senior vice president of rail services at SMRT, said: "In the past, we used to wait until the wear is 14mm before we replaced the rail. Now, instead of 14 mm we are shortening it to 12 mm.
"This means we are replacing it earlier, and that would mean additional maintenance efforts. We are in discussion with LTA for resources that we will need to increase our capacity for replacing the rail."
These resources include additional workshops to pre-fabricated rails.
SMRT said it has identified 40km of rail which need to be replaced -- the Nort South-East West Line has a total of 400km of rail.
Mr Lee added: "If we do not increase our capacity, it may take up to five years to replace the rails, but if we do increase our capacity, we are hoping to reduce it to two years."
LTA said that although the rail network is ageing, a complete overhaul is not necessary.
Mr Chua said: "Now, because the rails do not wear at the same limit throughout the whole railway, some stretches will wear faster -- for example at curves. So therefore, the replacement must be done on a basis where there are instances of the wear limits.
"The other occasion where rail is required to be changed is where there are defects that are found. For example, where there are cracks or corrugations on the rail head or the rail surface."
The LTA said it is monitoring SMRT's remedial actions very closely. It is stepping up audits on SMRT's maintenance works -- up from monthly to fortnightly -- to ensure checks are done thoroughly.
LTA will focus its audits on the track curves, as the recent rail cracks have occurred along such stretches.
To better determine what further measures can be taken to address the situation, LTA will be appointing an international trackwork specialist to assess the condition of the rail and to advise on possible changes to the operator's running rail maintenance regime.
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Not very assuring eh? A crack track is not one to be meddle with. Any physical defect with it will cause a derailment if serious, and if there is such a day in Singapore's history, it will be very ugly judging by how crowded are our MRT trains. The authorities will have to take this seriously and keep a very close watch on SMRT.
Motorists may be charged for the distance they drive, and not only at fixed points, under a next-generation Electronic Road Pricing (ERP) system being studied by the Land Transport Authority (LTA).
If implemented, the new ERP system — whose working name is ERP2 — will be “fairer and more equitable” to motorists, said Transport Minister Lui Tuck Yew yesterday.
He said: “ERP2 will give us the option of charging for congestion based on distance, and not only at discrete points. This will be fairer and more equitable to motorists as the charges will be proportional to the distance they travel on a congested road, in other words, proportional to how much they actually contribute to the congestion.”
Motorists driving the same vehicle type passing under an ERP gantry now pay the same rate, regardless of their distance travelled.
Under the new system, some motorists may pay more while others will pay less, depending on the distance they travel on the congested road, Mr Lui said.
The Transport Minister, however, stressed that the new system is still “several more years” from being rolled out. If it does, it will start off only on roads currently priced by the ERP system, and that it will continue to be used as a “congestion management tool” to be used “only where and when there is congestion”, he added.
ERP2 will not, he assured, be something that “charges the minute (motorists) leave home or start their engines” and drivers will “generally have the same paying experience”.
Mr Lui also noted privacy issues expressed by some Singaporeans and stressed that the Government would “safeguard the confidentiality of motorists”, such as by anonymising any data collected and developing privacy safeguards.
The new system, which uses global navigation satellite systems (GNSS) technology, works with an On-Board Unit (OBU), which will replace the existing In-Vehicle Unit (IU). The OBU will link up with the satellite systems to check how far a vehicle travels along ERP-active roads. This would detect if drivers use only 50m or 500m, and charge accordingly.
“As it makes do without large physical gantries, it will allow us to respond faster and more effectively to tackle congestion, and is also likely to be cheaper over its life cycle compared to the current system,” said Mr Lui.
Highlighting Singapore’s land constraints, the Transport Minister said during his visit to the Marina Coastal Expressway (MCE) yesterday that “it is unlikely that we will be able to build many more massive projects like the MCE”.
“Given the constraints to building more roads, we will need to rely even more on vehicle ownership and usage restraint measures to manage traffic congestion,” he said, but stressed that the Government will “take a balanced approach”. Public and stakeholder views will be welcomed, he added.
Singapore was the first country in the world to implement congestion pricing in 1974, and has served as a model for places such as London and Stockholm.
Experts welcomed the potential move, as they felt that distance-based systems to be one of the fairest in terms of addressing traffic congestion. Adjunct Associate Professor Gopinath Menon of Nanyang Technological University’s Infrastructure Systems and Maritime Studies noted there are three types of possible pricing systems to choose from — location, time and distance-based, of which the current ERP utilises the first.
Assoc Prof Menon, who was previously LTA’s Chief Transportation Engineer, pointed to how GNSS technology is used on Germany’s autobahns, the country’s national motorway. The key difference, he said, being autobahns is “toll-based”, while Singapore’s ERP system is “congestion-based”.
While a GNSS-based ERP system may face challenges here — such as losing satellite signals when driving underground or through high-rise buildings — these “can be overcome”, said Assoc Prof Menon.
Beacons could be embedded on lamp posts to help correct the signal, said Associate Professor Lee Der Horng of the National University of Singapore Department of Civil and Environmental Engineering, who noted that accuracy in urban areas “is the major limitation” to the system.
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There you go, it is really happening; a GPS based ERP system, but only a few more years down the road. Let's not let this news cloud the main news of the Marine Coastal Expressway opening its roads by this year end. I for one can't wait to travel in it and skip the jam plus hassle of going up the Sheares Bridge just to get to AYE from KPE.
This should be able to relief some traffic volume on the ECP along the stretch of road and less cars will be using the Rochor exit now that the MCE provides an alternative exit to the Marina City area.
The driver of a blue Honda caught on camera for refusing to give way to a private ambulance has been penalised by the Traffic Police.
Deputy Prime Minister Teo Chee Hean said in a written reply to Arthur Fong, MP for West Coast GRC, that the driver has fined $160 dollars, and incurred four demerit points to his driving record.
The driver of the Honda was captured on video refusing to give way to an ambulance, despite the ambulance's blaring siren and flashing red lights.
The video was taken on Mar 14, and uploaded to YouTube a day later. It then went viral on the Internet.
In the video, a blue Honda car is seen staying on the right lane in front of an ambulance. Even as the two vehicles drove down the Pan-Island Expressway (PIE), the blue Honda stayed in front of the ambulance and did not give way.
Later, the ambulance driver slowly filtered left and edged out to the neighbouring lane. The ambulance driver then wound down the window and started gesturing towards the driver. He then drove off rapidly after that.
A Stomp contributor said what the driver did was illegal, according to the Public Order Act.
The contributor wrote:
"Under the Public Order Act, Chapter 257A, Part II: Public assemblies and processions. #18 Obstruction to free passage of any ambulance states that the person shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 6 months or to both."
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Good job done by the authorities. Such actions should never be pardoned. Singaporean drivers are an ungraceful bunch, even when it's an emergency vehicle at its mercy.
To further ease traffic congestion, the Ayer Rajah Expressway will have four more ERP gantries come mid-2014.
Three new gantries towards the city between Jurong Town Hall Road and Clementi Road will be operational during the morning and evening peak hours on weekdays.
The first gantry will be located just before Clementi Avenue 6 exit, while the other two gantries will be located at the slip roads into AYE from Clementi Avenue 6 and Clementi Avenue 2.
The fourth gantry located just before the Clementi Road exit towards Tuas (between North Buona Vista and Clementi Road) will be operational only during the weekday evening peak hours.
The Land Transport Authority said over the past one and a half years, traffic speeds at both locations have dipped, going as low as 35 kilometres per hour.
This is below the optimal speed range of 45 to 65 kilometres per hour for expressways.
Traffic conditions along the corridor are also expected to worsen when traffic demand goes up with future developments such as the Jurong Gateway.
Construction of the ERP gantries will start in the later part of this year.
LTA said it will announce the operating hours and charges closer to the implementation of the gantries.
LTA said motorists who wish to avoid paying the ERP charges can make use of alternative routes including the West Coast Highway and Commonwealth Avenue-Tiong Bahru Road corridor.
Public transport alternatives in the west will also be ramped up for motorist who wants to make the switch.
From the third quarter of 2013, commuters in Jurong West will have a City Direct bus service during peak hours.
LTA is also looking at having a similar service from Clementi.
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Another reason for westsiders to cry about this time next year when four new gantries will be erected to charge you for contributing to congestion. The result will be pushing more traffic to Westcoast Highway and we shall see how long will LTA take to erect a gantry there just like what they did to Nicoll Highway. Happy paying, drivers.
Motorists who install video-recording devices in their vehicles could get discounts on their motor insurance premiums.
This possible incentive is being studied by a working group formed by the Traffic Police and the General Insurance Association (GIA).
Both see the move as a way to encourage better behaviour on the road, Traffic Police Commander Cheang Keng Keong told The Straits Times this week.
Improving driver behaviour, he said, was key to lowering accident rates.
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I don't see encouraging better behaviour working even with cameras mounted. It will just serve as an evidence for the stunts such drivers resort to to claim insurance when it is actually their fault.
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?
