Motor vehicle sales down 43% in July

SINGAPORE — Car dealers appear to be still feeling the effects of the Monetary Authority of Singapore’s curbs on car loans introduced in February, with data showing that motor vehicle sales dropped by almost 43 per cent in July from a year ago.

This follows a 26.9 per cent year-on-year decline in car sales reported for June, according to the Retail Sales Index for July released by the Singapore Department of Statistics yesterday. The decline was less marked on a month-on-month basis, with car sales falling 19.7 per cent in July from June.

CIMB economist Song Seng Wun said month-on-month numbers may not portent significant trends, but a 19.7 per cent fall is “still massive” and “clearly shows that the motor sales industry is still feeling the effects of the restrictions on loans brought in earlier this year”.

Yong Lee Seng Motor Director Raymond Tang said used-car sales at his company have halved since the 60-day reprieve from the loan restrictions for used cars ended in early June.

According to statistics from the Land Transport Authority, the number of cars with transferred ownership — which indicates used-car activities — has been decreasing steadily since May, when 6,875 cars were transferred.

In June, 4,746 cars were transferred in name, while 4,639 cars were transferred in July. Last month, the numbers further declined to 4,136. In comparison, 7,098 cars were transferred in August last year.

Used-car salesman J Cai said his company, which operates out of Grandstand Car Mall, managed to sell only four cars in July, less than half the number sold in June. He added that things picked up slightly last month, with about seven cars sold.

As for new car dealers, Mr Ron Lim, General Manager of Nissan agent Tan Chong Motors, said he did not observe a discernible decrease in the number of cars sold for the months of June and July. However, sales have generally been poorer this year, he added, saying his company sells an average of 130 to 150 vehicles monthly.

Said Mr Lim: “The number of monthly car sales are fixed for us, because we are restricted by the Certificate of Entitlement (COE) quota released each month, so I don’t see car (sales) slowing down these few months for the new car industry, unless it’s a matter of registration timing.”

Volkswagen said it sold 257 cars in June and 271 cars in July. This number is comparable to the 278 and 252 sold in the corresponding period last year.

Dealers TODAY spoke to said they were adopting a wait-and-see attitude as to whether car sales will surge over this weekend — the first after tweaks to the COE system were announced on Monday. Said Mr Tang: “We will observe how things pan out this weekend before making a decision on our next move.”