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    Jul 14, 2014

    Some budget cars may cost more with new rule

    SOME budget cars may be reclassified as premium models when a new rule that requires cars to be tested for engine power before they can be sold is introduced.

    The rule, to be implemented by the Land Transport Authority (LTA) from October, could mean some budget cars costing more. This is because their engine power outputs are close to the 97kW cap for COE Category A, and a test - now mandatory for cars producing between 81kW and 97kW - could show a higher number.

    If so, they will be moved to Category B, where they will compete with costlier models for certificates of entitlement (COEs). Cat B COE usually costs more than Cat A COE.

    Cat A cars with engine power close to 97kW include the Kia Forte K3, Hyundai Elantra, Hyundai i30, Toyota Corolla Altis, Honda Civic, Honda Jazz, Ford Focus and Volkswagen Jetta.

    Motor industry sources said car manufacturers are usually conservative in their power declarations, to avoid consumer complaints.

    Since February, Cat A cars must meet two criteria: an engine size of not more than 1,600cc, and a power output of not more than 97kW or 130bhp.

    The second criterion was implemented to level the playing field for sellers of mass-market cars, who in recent years have faced competition from 1.6-litre models from luxury brands such as Mercedes and BMW.

    But as soon as the new criterion was introduced, a number of European makes - including Mercedes - brought in models that produced slightly less than 97kW.

    So, the LTA declared last month that Cat A cars must undergo tests on a chassis dynamometer - a "treadmill" for cars - to verify the power figures declared by their makers.

    The authority said it will also review data supplied by importers and dealers via "independent checks with overseas counterparts" and other resources.

    This is the first time vehicle data is challenged this way. And because of this, it will take up to four months before a new model is approved for sale - up from one to four weeks previously.

    Car dealers described the move as "disruptive", "arbitrary" and "unilateral".

    They also warn that some budget cars might fail to meet the power cap, and be moved to Cat B. This will nullify efforts to separate mass-market cars from premium and luxury cars, so that each category has a more equal footing in competing for COEs.

    Say Kwee Neng, managing director (Singapore, Indochina, Indonesia) of Sime Darby Motors, said: "How did we end up in this blind alley?

    "We all gave feedback that engine power was not a suitable criterion and, now, we're trying to find fixes."

    Jardine Cycle & Carriage managing director of motor operations Eric Chan said: "We respect their (the LTA's) right to do this but, certainly, four months is too long an approval process."

    Car dealers said the process will also raise operating costs, as cars spend more time in storage before they can be sold.

    The cost of the dynamometer test - to be borne by motor companies - has not yet been determined.

    Other industry players warn that dynamometer test results can vary, depending on the type of fuel, tyres, wheels, gearbox, and even the air temperature and how warmed up the engine is. It depends on how the dynamometer reading is interpreted too.