Engine capacity and power battery proxy

Media Replies 17 Sep 2013

We refer to the letters in TODAY on the refinements to the Certificate of Entitlement (COE) and thank the writers for their views. (TODAY, 11 and 12 September 2013)

Many people suggested categorising cars according to their Open Market Value (OMV). However, using OMV directly is problematic because a car’s OMV can fluctuate significantly over a short period of time, depending on exchange rates and car model specifications. Averaging the OMV would not solve the problem, as OMV can still change over time, albeit at a slower pace. For example, from January to August 2013, the OMV of the Honda Civic 1.6L fluctuated between $15,911 and $21,736, and the OMV of the Volkswagen Beetle 1.2L fluctuated between $18,918 and $20,919.

A practical alternative is to use the known, verifiable characteristics of a car. From back-testing data on models sold in Singapore, we have found that the combination of engine capacity and engine power would be a better proxy for OMV than engine capacity alone. Using this criteria, more than 90% of the 2012 cars that would remain in Cat A, including family-friendly models, would have an OMV of less than $20,000, which was what most respondents preferred as the threshold for Cat A.

Some suggested using carbon emissions or fuel efficiency. However, they are not good proxies and could end up penalising mass-market models. They are also already accounted for under the Carbon Emissions-based Vehicle Scheme (CEVS), and we remain open to reviewing the CEVS on a regular basis to ensure it meets the objective of reducing carbon emissions in our vehicle population in support of our broader national plan to reduce our carbon footprint.

Ultimately, any option that is adopted would have some limitations, and we certainly do not rule out reviewing the COE system in the future to better address the various concerns and suggestions raised by the public.

 

Helen Lim (Ms)

Director, Media Relations

Land Transport Authority

 

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