COE prices are stabilising currently at a high even with the slight decrease in COE premiums. The situation is still fluid because there might cause a surge in demand again on the way to Chinese New Year where some people might want to change car by then. Hence, car-sharing is back in business in theory if COE for the Categories A and B cars soar above the $30,000 and $60,000 support levels respectively.
NTUC Income scrapped its car sharing business early this year just around the time when the government announced new car population cooling measures. NTUC Income probably was on the road to divesting from non-insurance ventures like its car co-op when COE premiums were still low in 2009. However, by 2010 it was maybe too late too hassle to reverse gears when the COE market changed. The remnant resultant smaller company Car Club has since enjoyed a turbo charge when Japanese investor Mitusi and Co drove in and acquired 58% of the former NTUC Income car venture in November last year.
Environmentally in carbon footprint and cost-wise, car-sharing makes sense in Singapore especially for those who work in the CBD area where parking rates are exorbitant if on-site or nearby parking is available at all, apart from the crazy COE prices. The conundrum for those planning to enter the car sharing market in the next few months is assessing whether the government might rethink its COE policy and car ownership scheme as a crowd-pleaser in the approaching elections.
Higher COEs drive up car rentals, sharing
by Hetty Musfirah Abdul Khamid
05:55 AM Jan 07, 2011
SINGAPORE – Higher COE prices are driving people to look for cheaper and more flexible options. Among them – car rentals and car sharing.
The higher COE has been good for Popular Rent A Car, with business jumping by about 20 per cent from a month ago, said its general manager, Mr Ho Kok Kee.
Some of its new customers were very likely to include those who had shelved their plans to buy a car, following the jump in COE prices.
However, despite the expected increase in demand for hire cars during the Chinese New Year (CNY) period, the company has put its expansion plans on hold.
Acquiring new cars with the higher COEs would raise the company’s capital and operating costs by 30 to 40 per cent, Mr Ho said. A third of its cars has already been booked for the CNY holidays. Mr Ho expects all its cars to be booked eventually, as in previous years.
Kah Motor is another company that’s not adding new cars to its rental fleet despite better business.
For the festive season, all of its small cars have been booked.
Its head of Rental and Leasing, Mr Choong Tat Soon, said unlike last year, more are also renting for longer periods – in terms of weeks, even for a year.
Some want to rent a car for some months until COEs dip and new cars become affordable again.
More people are now open to the concept of car-sharing, with industry players reporting a 15-20 per cent increase in membership applications in the last two months.
Some households with two cars were giving up one and sharing the other – to be used by the wife to “go for shopping or to pick up the children”, said Mr Choong.
With higher value for used cars, trade-ins are seeing a 70-per-cent increase compared to two or three years ago, said the honorary secretary of the Singapore Vehicle Traders Association, Mr Raymond Tang.
Those who do a trade-in feel they are upgrading to a “newer” vehicle, said Mr Tang. Hetty Musfirah and Seet Sok Hwee
Car Co-op liquidated but will live on as a smaller outfit renamed Car Club
Christopher Tan, Straits Times 13 Mar 10;
NTUC Income has quit the car-sharing business it pioneered here more than a decade ago.
Its move follows two other car-share operators which have closed shop in recent years.
The cooperative-based local insurance giant cited the need to focus on its core business as a reason for liquidating the profitable 13-year-old Car Co-op.
The divestment is another in a series of moves by Income to get out of non-insurance activities since 2007, when leadership at the insurance cooperative passed from Mr Tan Kin Lian to Mr Tan Suee Chieh.
Income has since pulled out from Snow City, fitness centres, a call centre, NTUC Income Travel & Recreation Club and student-care centres.
Car Co-op will, however, live on as a pared-down operation following a management buyout by its former employees.
Renamed Car Club, the outfit has 22 cars shared by 300 members, down from its peak, when it had almost 190 cars and 4,500 members.
Car Club director and majority shareholder Lai Meng, who used to head Income’s non-core businesses and who set up Car Co-op, said: ‘We believe in car-sharing and we believe it has great potential.’
Going by its last audited accounts, Car Co-op was a little over $500,000 in the black in 2008.
Car-sharing was raised in Parliament on Thursday, when MPs Lim Wee Kiak and Ahmad Magad called on the Government to look into promoting it.
Responding, Transport Minister Raymond Lim said: ‘From an overall transport perspective, more people sharing a car in effect increases the use of that car.
‘But we recognise that there is a niche market for such services, and we will leave it to private enterprises.’
But those enterprises have dwindled. In 2007, transport giant ComfortDelGro Corp pulled the plug on its CitySpeed car-sharing firm after five years, explaining that falling car prices had made the business less viable.
The following year, Japanese carmaker Honda said its then six-year-old car-sharing scheme had become too big and unwieldy for it to maintain service standards.
The scheme continues today with a fleet of Civic Hybrids on a much smaller scale at Honda agent Kah Motor. From 100 cars and 2,500 members, it now has close to 50 cars and 300 active users.
Kah Motor seems to be managing the downsized business fairly well. It has added other models to the fleet and is looking to set up a new port in Toa Payoh this month, bringing the total to 17.
Observers say there are two main reasons car-sharing has sputtered and stalled. Transport researcher Lee Der Horng of the National University of Singapore said: ‘It has much to do with car prices which have been comparatively low in recent years. So the savings you get from car-sharing are insignificant.
‘Also, the system is not all that friendly. It is better than renting a car, but not better than having your own car.’
Still, long-time Car Co-op user David Yeo said he will carry on with Car Club.
The technical officer said he sold his car in 2003, when he moved near Aljunied MRT station.
‘But occasionally, I still need a car. Car-sharing is more flexible than taking a cab, and I’ve had fairly easy access. I’m able to get a car more than 90 per cent of the time I book one,’ the 44-year-old father of two said.
There are about 200 car-sharing schemes around the world. Interestingly, the IT system many of them use was devised by Income’s Car Co-op and German solutions provider Invers more than 10 years ago.
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