Dealers prepare for expanded ETS but may face stock issues

The bigger pool of diesel commercial vehicles eligible for the Early Turnover Scheme (ETS) from August onwards will be 'a good sales opportunity' for dealers. But if last year's experience is anything to go by, the spike in demand may again lead to stock issues and delayed deliveries, reported The Business Times.

From 1^st of August 2015 to 31^st of July 2017, the ETS will be expanded to include owners of Category C diesel vehicles with Euro II/III emissions standards - a move that will impact some 59,000 vehicles, or about 40 percent of the total Cat C diesel vehicle population.

In March 2014, the ETS incentives were enhanced for this group of vehicles and sparked strong demand.

Under the ETS, owners of such diesel vehicles can register a new one without having to bid for a Certificate of Entitlement (COE). They merely pay the prevailing quota premium (PQP), which is discounted against the bonus COE period granted to them for the remainder of their old vehicle's 20-year lifespan.

Tan Chong Motor Sales is the authorised Nissan distributor, and the Japanese manufacturer has been Singapore's top light goods vehicle (LGV) brand since 2010. Last year, Tan Chong's top two models were not passenger cars but commercial vehicles: the Nissan Cabstar 15-foot lorry (1,406 units), and the NV350 panel van (999 units). By contrast, the top passenger model, the Nissan Sylphy, garnered only 916 units.

"With passenger car COE premiums high, buyers' attention shifted to European luxury models, leaving the mass market to suffer," said Ron Lim, Tan Chong Motor Sales' General Manager for sales and marketing. So Tan Chong decided to concentrate on LGVs because "people still prefer Japanese quality products - plus we didn't have to face competition from European brands". 

Nevertheless, there will be a European factor in the latest ETS enhancement. From August, there is an additional bonus COE period if eligible vehicle owners replace their existing vehicles with even cleaner Euro VI vehicles instead of Euro V. "Most of the commercial vehicles, if any, that comply with Euro VI standards already are those brought in by the European makes," said Mr. Lim. "So I suppose they might benefit the most, especially for the HGV (heavy goods vehicle) segment as the additional 10 percent incentive can be substantial."

For now though, he is more concerned about any potential supply bottlenecks. With nearly 60,000 Euro II/III vehicles qualifying for ETS, strong demand is expected for any available new vehicle stock in the market. "Based on last year's experience, some customers may have to wait for months for their vehicles because of shortage of stock to cater to demand, which might end up affecting their operations."