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New Criteria for Cat A Cars

21 Sep 2013

Below is a Facebook post by Minister Lui Tuck Yew on his visit to the LTA on 9 September 2013.

Earlier this year, I asked LTA to look at possible improvements to the COE system from a social equity perspective, and to consult the public and industry in the process. We received a lot of thoughtful feedback and I would like to thank everyone who contributed to the discussion.

To better achieve the original purpose of having Cat A for the mass market, I have decided to add an additional engine power criterion of 97 kilowatts, which is the industry standard for 130 brake horsepower, on top of the existing engine capacity criterion of 1,600cc. Using this combination of 130bhp together with 1,600cc for Cat A, more than 90% of the car models remaining in Cat A will have an OMV of less than $20,000, which was what most respondents in our consultation had wanted for Cat A.

On multiple car ownership surcharge, most participants concluded that a surcharge could not be implemented effectively. There was also a lack of consensus on two popular suggestions - a Pay-As-You-Bid system, and banning dealers from bidding on buyers’ behalf. Experts in auction theory cautioned that Pay-As-You-Bid may not lead to lower COE prices as prices are ultimately driven by demand, while survey respondents were split about half-half whether dealers should bid for COEs on their behalf. So we will not make any of these changes for now.

I hope that Singaporeans can understand that given our land constraints, not everyone can own a car. What we will do is to continue to invest and improve our public transport system, and provide Singaporeans with a standard of service that is higher than what we enjoy today.