27% plunge in car sales spoils retail landscape

Used car showrooms at Turf City. June's motor vehicle sales plunge is likely due to the ending of a 60-day suspension on car loan curbs.
Used car showrooms at Turf City. June's motor vehicle sales plunge is likely due to the ending of a 60-day suspension on car loan curbs.PHOTO: JAMIE KOH

Sales of motor vehicles swung into the slow lane in June but other parts of the retail landscape were in better health, according to numbers out yesterday.

The drag from the car yards sent overall retail sales down 4per cent in June compared with last year and 6.9 per cent compared with May.

If motor vehicles were excluded, June's retail sales would have risen by 2.6 per cent from a year ago and by 1 per cent over May, said the Department of Statistics.

Vehicle sales plunged a striking 26.9 per cent in June over the same month last year and 33.8 per cent over May's level.

Citi economist Kit Wei Zheng said June's sales plunge was likely due to the ending of the 60-day suspension of car loan curbs for used vehicles.

Buyers of new or used cars will no longer be able to take a loan of more than 60 per cent of the car's price.

This is in line with new rules that took effect on Feb26.

The Monetary Authority of Singapore lifted the loan curbs on used cars for 60 days in April in response to repeated appeals from car dealers.

That suspension, which sent car sales surging in April, ended on June4.

Consumers spent more on food and beverages and medical goods and toiletries in June than in the previous year.

They also increased their spending at supermarkets and department stores.

These sectors recorded increases in sales of between 6.2 per cent and 7.8 per cent.

Apart from car showrooms, sellers of telecommunications apparatus and computers also saw less activity at the tills, with sales down 8.2 per cent in June compared with a year earlier.

Sales of furniture and household equipment declined 3.5 per cent.

Retail sales in June registered declines in a number of sectors over May, including department stores, food and beverage, watches and jewellery and telecommunications apparatus and computers.

This may be attributed to hazy conditions in late June which could have deterred consumer spending, said OCBC economist Selena Ling.

chiaym@sph.com.sg