Give the big picture on land transport

END OF ROAD FOR TURBOCHARGED CARS? Brands like Volkswagen have been affected by LTA's inclusion of an engine-output limit for the small-car COE category, because turbocharging - big in Europe for offering power and fuel efficiency - may no longer be viable here unless special models are created for the Singapore market.


    Jan 15, 2014

    Give the big picture on land transport

    IF THE Land Transport Authority (LTA) were to write a movie script, chances are it would be a box-office hit.

    Because the way it goes about carrying out its transport policy has more surprises than a thriller and, if you believe some of the motor distributors, the suspense is really killing them.

    Monday delivered one such surprise. The authority had summoned motor distributors for a "short briefing" on the certificate of entitlement (COE), but it turned out to be a policy announcement - and a minor one, at that - of the changing of the half-yearly COE quota to a quarterly one.

    Dealers and distributors who had expected more were devastated that it was not a dialogue or consultation session; they had come with questions, but could not ask them.

    True, the invitation did say "briefing", but for a group of guys whose business has been hurt by the COE crunch, vehicle-financing restrictions and higher registration taxes, it does not take much to get them excited about any meeting with the powers that be.

    There is no doubt that vested financial interests are the source of any unhappiness they may have with the LTA.

    But it is difficult to quibble with their general view of the LTA, which can be summarised into two points - that it either does not understand or listen to the industry, and that it makes piecemeal, short-term decisions.


    The first may be a bit of an overstatement. As one distributor put it, it is not so much that the LTA refuses to listen to the industry but, rather, he gets the feeling that it invites feedback and opinions when it seems like it has already decided on an issue.

    One example he cited was last year's public consultation over the categorisation of cars based on OMV, or open market value, and multiple-car ownership.

    In the end, an engine-output limit of 97 kilowatt or 130 horsepower was adopted for the small-car COE category, despite strong arguments for using the OMV factor.

    But the second point about short-term decisions may have implications for Singapore's new-car market. The owner of a mid-sized dealership complained that the recent transport policy appeared to be a knee-jerk reaction.

    It is like the LTA has no long-term strategy, he laments. Why won't it give us the big picture, like what will happen three or five years down the road - instead of a little at a time?

    Monday's three-month COE quota is an example, although the LTA says it had proposed introducing quarterly quotas in 2010 because a shorter period makes it a more responsive system and, by that implication, smoothens out price fluctuations.

    But the dealer's point is that piecemeal pronouncements are made every few months, but no one is the wiser about the general policy direction.

    He said that the industry wants to know, for example, what is the long-term plan for the COE system. Will suggestions to smoothen out the COE's boom-and-bust cycle be accepted? What is the future of electric vehicles after the launch of yet another trial? Or will they eventually end up like compressed natural gas vehicles?

    This information is important for the public, distributors and manufacturers because everyone needs to plan for the future, he said. The engine-output limit "came out of the blue" and caused brands such as BMW to lose out completely because all its models have exited Category A.


    Brands such as Volkswagen and Opel have also been affected because turbocharging - big in Europe for offering power and fuel efficiency - may no longer be viable here unless special models are created for the Singapore market.

    Will manufacturers want to cater for the tiny Singapore market if it is less than profitable? Or would they ignore it altogether?

    So perhaps the only question for the LTA that really matters is: Can you please tell us more?