Number of cars in S'pore slows down to 5-year low
SINGAPORE's car population has shrunk to a five-year low, reversing an almost unbroken growth trend over the past decade.
If the cohort of rental cars - which has ballooned on the back of demand from app-based taxi services such as Uber and GrabTaxi - is taken out, the car population would be the lowest in six years.
Latest population statistics from the Land Transport Authority (LTA) reveal that the passenger car population fell for two consecutive years to reach 575,353 last year - 4.1 per cent lower than in 2014 and the lowest since 2009.
Rental cars, on the other hand, grew by 55.8 per cent last year to a record 29,369.
The unusual growth pattern, which came on the back of a 5 per cent growth in the road network, took place despite an allowable growth factor in the vehicle quota system.
Motor traders said this was because of a time lag between vehicle deregistrations and certificate of entitlement (COE) allocation. For instance, the February-April 2016 COE quota is based on vehicles scrapped in the October-December 2015 period.
Ron Lim, general manager of Nissan agent Tan Chong Motor, said: "The current allowable growth rate of 0.25 per cent is not big enough to offset this lag."
And as part of the COE quota is based on vehicle population, a shrinking population would then have a negative impact on the number of COEs available, he added.
LTA, however, said the shrinkage is "temporary" and the population will be back on the growth path once the COE supply "catches up".
Observers said this could happen within the next two years when COE supply, fuelled by record deregistrations, is expected to explode.
Experts reckon the car population shrinkage is in line with the Government's current "car-lite" push.
Walter Theseira, an economist at SIM University, said: "In the longer run... the policy is to slow the COE growth rate to nearly a standstill. It's currently 0.25 per cent and indications are that it may tighten further in the future.
"I would favour a greater vehicle population but with much more emphasis on pricing utilisation and congestion. If driving is expensive, even if ownership is not, people will choose to use other means of transport."
Nanyang Business School adjunct Associate Professor Zafar Momin said: "While the case for zero growth in car population can be argued both ways, it is important to carefully weigh two main factors: the value of being equitable versus the value of providing efficiency for Singaporeans.
"Providing access to car ownership to those who need it the most should be at the heart of designing any policy mechanism to achieve a balance between the two."