Singapore car sales set to jump 20% in two years; highest rise in Asean

Potential car buyers at the Toyota showroom on Leng Kee Road. According to a study, car sales in Singapore are expected to jump 20 per cent in the next two years - the highest growth in the South-east Asian vehicle market. -- PHOTO: ST FILE 
Potential car buyers at the Toyota showroom on Leng Kee Road. According to a study, car sales in Singapore are expected to jump 20 per cent in the next two years - the highest growth in the South-east Asian vehicle market. -- PHOTO: ST FILE 

SINGAPORE - Singapore is poised to lead the South East Asian vehicle market with highest sales growth in the next two years, as older cars get de-registered and replaced at the end of 10-year COE validity cycle.

Annual average growth of 20 per cent is expected after seven years of decline between 2007 and 2013, a study by BMI Research found, which will continue at a rate of 30 per cent annually between 2015 and 2019.

Singapore's position will be cemented by weakness in the region's other major markets of Malaysia and Indonesia, but faces strong challenges from Philippines and Vietnam with its low levels of vehicle ownership and a strong consumer strength.

Expiry of Certificates of Entitlement (COEs) often leads to scrapping of old cars and buying new ones in Singapore.

Japanese brands dominated first four months of sales in 2015 in Singapore, with Toyota leading the pack followed by Honda, Mazda and Nissan. Mercedes-Benz was placed second on the list of top five consumer choices in the Republic.

Analysts expect Japanese brands to further lead among the volume carmakers as they gain a price advantage due to a weak yen.

Indonesia is forecasted to see a further 6.6 per cent contraction in sales in 2015, as high interest rates and tighter regulations on lending dampen sales growth.

Malaysia will achieve positive growth in 2015 but at 1.9 per cent, it will be weak by historical standards due to subdued economic outlook and the introduction of Goods and Service Tax (GST) in April, BMI Research said.

The Philippines and Vietnam, challengers to the regional leader, recorded a growth of 29 .5 per cent and 37.6 per cent respectively in 2014, but a growth of 13.2 per cent and 19.9 per cent is expected in 2015 for both countries respectively.

Robust consumers and surging car demand has attracted the likes of Rolls-Royce Motor Cars, which opened a new showroom in Manila in March, while loosening credit and a positive economic backdrop will be driving growth in Vietnam, BMI research found.

rupsk@sph.com.sg