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New cars jammed up as LTA reviews approval process

LTA is taking a longer time to vet new cars for sale as it reviews its approval process

Published on Jun 1, 2014 1:14 PM
 

The new model you have been looking forward to may be a little late. But not because the manufacturer or the agent screwed up.

It is because there is a bottleneck at the Land Transport Authority, which inspects and approves all new vehicles sold here. The process, called homologation or type approval, is now taking longer.

In some cases, a lot longer. The new Porsche Panamera e-Hybrid, a plug-in petrol-electric car, arrived in Singapore in November last year. But it still has not been approved.

A plug-in hybrid version of the Mitsubishi Outlander has been awaiting approval since January.

The new Citroen Picasso has been similarly stuck for nearly three months now. In fact, agent Cycle & Carriage had to cancel a launch scheduled for end- March.

The Land Transport Authority (LTA) explained that it was "currently reviewing the Vehicle and Inspection Type Approval System process".

The authority added: "As part of the review, LTA is gathering and evaluating additional information on cars to be imported. The lead time for approval may thus be longer. We have communicated this to the industry."

The industry, however, remains perplexed.

Said one motor trader: "We understand that an all-new model may take longer to process, but even cars with previously approved engines are now taking two months. It used to take two to three weeks."

Another motor trader said: "They used to ask only technical questions. But now, they're asking what price we intend to sell the car at, expected sales volume, cost prices, market share... competitive information."

Life! understands the "review" has to do with the recent COE recategorisation, which requires cars in Category A to have no more than 130bhp of power as well as a 1,600cc cap on their engine size.

The intent was to return equity to Category A, which has, in recent years, been over-run by luxury brands.

But since the new criterion kicked in in February, the industry has begun bringing in models that beat the power cap.

Mercedes-Benz was the first to do so, with a range of 122bhp models. Others have begun introducing turbodiesel models, which are typically lower on horsepower but high on torque values.

Sources said the LTA wants to make sure Category A cars imported today actually do not produce more than 130bhp and also to have assurance from the industry that engine output cannot be raised after they are sold.

There is also talk that the authority is looking at including OMV (open market value or a car's landed cost) as an additional element in COE categorisation.

But this does not explain why cars bigger than 1,600cc are affected by the longer process too. The authority would not say more.

The chief executive of a major dealership said: "These delays are unacceptable. Who's going to foot the interest charges or the cost of an ageing inventory? Each day we don't sell, we lose."

Motor Traders Association president Glenn Tan said the trade body is now compiling a list of all car models affected by the delay, before bringing the matter up to the LTA at the end of next month.

"It's getting quite bad," he added. "Almost every brand is affected."

The automotive committee of the Singaporean-German Chamber of Commerce and Industry is also approaching the LTA, as a number of German cars are affected by the hold-up - or are expected to be held up.

BMW, for instance, plans to launch its i3 electric hatchback and i8 plug-in sports car in July.

"It may also be a case of technology moving ahead of regulation," an industry observer said. "For instance, there may not be existing guidelines on plug-in hybrids, which are actually electric cars with combustion engines."

Industry players said the delayed roll-out of new cars may have contributed to the drop in COE prices in the last two months.

"We're beginning to wonder if this is another market cooling measure," one quipped.

christan@sph.com.sg

Background story


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