Singapore’s Land Transport Authority (LTA) has announced that the growth rate for cars and motorcycles in categories A, B and D will be zero from February 2018, down from the current 0.25%. According to Todayonline, the previous cut was in February 2015, when it was halved from 0.5 to 0.25%. The vehicle growth rate will be reviewed again in 2020.

The cut, according to the LTA, is primarily driven by land constraints and ongoing improvements to the public transport system. Currently, 12% of the country’s total land area is occupied by roads, but rail network has grown in length by 30% over the past six years. There are new upcoming projects as well, such as adding new buses to serve new routes.

However, the growth rate for Category C vehicles (commercial vehicles and buses) remains unchanged at 0.25% until 2021. This is so that businesses will have more time in upping the efficiency of logistics operations, which includes cutting back on the number of commercial vehicles needed.

The LTA expects this move will not significantly affect the supply of Certificate of Entitlement (COE), which is predominantly determined by the number of vehicle de-registrations. The move just means that the supply of new COEs will now match the number of vehicle de-registrations, with a zero growth rate factored in. It does not mean that new car sales in Singapore will stop.

The Mazda CX-5 falls under Category B – big cars above 1,600 cc

As for the issuance of COE, it was revealed that quota for November 2017 to January 2018 will shrink 5.3% from the current quarter (August to October ’17) to 25,913, and this is for all categories combined. That’s 8,635 COEs on average per month, which continues the downtrend that started last quarter.

Certificate supplies for categories A (small cars up to 1,600 cc), C and Open Category (Cat E) have all taken a hit, but Category B (big cars above 1,600 cc) sees a seven percent increment to 8,246, while Category D (motorbikes) will go up from 2,862 to 3,053 (up 6.67%).

While owning a car remains an aspiration for some, it’s worth noting that the tightening supply of vehicles may lead to higher car prices. This could ultimately force people to take the more economical route that is public transportation.

“Raising the reliability and quality of public transport would also help a car-lite society to take shape here,” said urban transport expert Park Byung Joon from the Singapore University of Social Sciences (SUSS).