It has been 2 years since COVID-19 and its multiple variants has hit our shores, and with various ways in which our lifestyle has been altered (i.e. working from home, flexible working schedules, home-based learning, social distancing), these changes has been said to inevitably alter our traveling habits.
This is in addition to Singapore’s strategy of having a Car-Lite society, where Singapore plans to embark on having more sustainable (and more environmentally friendly) traveling modes, with greater reliance on improved public transports and on alternative modes of transport (e-bike, scooters etc.).
Infrastructurally, Singapore has also seen the conversion of parking spaces in existing public car parks (i.e. Jurong Lake, Woodlands North), which is said to be inefficiently space consuming, to other uses like cultural parks, house shared mobility services and commercial uses.
However, interestingly, the demand for car ownership has continued to be consistently high despite these surprising changes as evidenced by car ownership rates and the COE prices hitting multi-year highs.
Why Is Car Demand Always Increasing?
The pandemic almost seemed as though it was the perfect natural storm of cutting down travel via private transport. However, this was not the outcome experienced.
Possibly, one key driving force is that since cars has always been seen as a key status symbol – much like the Rolex or the LVs of the world, the ownership of the car symbolizes one’s ability to withstand the ever-climbing COE prices, as well as tolerate its depreciating costs year on year.
This demand, ironically, could be further exacerbated due to the rise of the “Car-Lite” movement, where ownership of cars would inevitably be increasingly few and far in between. As demand stays high and supply dwindles as the years pass since the inception of COE’s “zero growth formula” in 2018, simple law of economics tells us that cars may eventually become a prized possession perhaps only the wealthy can afford.
Increased Number of Millionaires in Singapore
To add on to the evidence, in 2020, Singapore is 11th in terms of millionaire density, where 1,361 ultra high net worth (more than US$ 50 million; which is about SG$67 million) reside. This number has also been said to increase by 60% from 2020 to 2025, with the surge in financial capitals due to the financial bull market since March 2020.
Rising COE Prices
Much has already been mentioned about the rising COE prices. In sum, it acts as a deterrent to potential car owners as they would have to pay the high upfront COE costs before they are given the right to buy and register for a vehicle. However, with the growing number of wealthy individuals on our shores, the concerns of rising COE costs may be negated by the growing “elite” population.
To go deep dive into our articles on COE, you may read:
- COE: What is it and why is it so expensive?
- COE prices surged highest in years – How COE relates to car rental customers
Cars Being a Symbol of Social Status and Prestige?
With power, money and a small supply, comes the privilege of cars to be a signaling factor for superiority and individuality. Having to commute by public transport, commuters would have to be subjected to the routine and schedule of the trains and buses. This causes a lack of flexibility, and freedom for the individual. Hence, adding to the functionality of the car, where it allows us to get from point A to B at a much quicker pace, compared to public transport, its symbolism of one’s image through the possession of the car could well resonate with many car owners as they opt to car ownership as an avenue to showcase status and wealth.
Additionally, in Singapore, where the middle class aspires for car ownership, and where the upper middle class aims for the luxurious continental cars it would also be doubtful that those in the upper echelons would have a preference for using public transport.
The Enhancement of Individuality
Cars come in many models, – each with its unique touch. There’s now a way for everyone to showcase their real or imagined status, and to control others’ perception of ourselves.
Think about the scenario where “Finally, you have achieved the ability to buy your dream car”. What would that be? How would that car help showcase your individuality?
Would you prefer a sleek black BMW or a pink mini cooper?
Could it even be an Electric vehicle or a convertible Maserati?
Whichever your decision – dig deep to find the motivation of why a certain brand/make of car over others. Perhaps, it is this relationship that we have towards cars – the ambition of owning one, and the intended or unintended showcase of uniqueness and merit, as Singapore continues to achieve success at greater economic heights – that poses possibly the greatest hurdle towards achieving the “Car-Lite” mode.
What Does it Mean for Car Rental in Singapore?
All there to say is that car rental fits the mode as it serves as a solution for all. Being somewhat of a Mobility-as-a-service (MAAS), similar but different to our counterparts like ride hailing and car-sharing, it helps mitigate the challenges of being sorely reliant on only public transport, and a possible solution for a cheaper, more sustainable way of commuting. It caters to the on-demand need of cars, and car rental customers can then only rent when a car is absolutely necessary, for any time frame.
Car rental serves to circumvent the exorbitant cost of COE, where the cost of COE falls on the weight of the car rental companies and is distributed amongst the customers. Hence, it may not be as daunting financially for the masses. Furthermore, renting a car allows one to enjoy the “simple luxuries of life” – the individuality and uniqueness that a rental car brings to fit any car rental need. You need not earn a 5 digit-salary to be able to afford or drive the continental cars.
Perhaps for short term car rental, it’s easy to mediate through the hassle of commuting, with ease and efficiency. Since car owners are also generally clocking lower mileages due to work-from home measures and home-based learning becomes more of the norm.
For long term car rental, the demand may still be in existence as even though drivers are clocking lesser mileage, more frequent trips are made to get essentials like driving to get meals and fetching children from school rather than relying on the school bus.
Hence, the demand for car rental could be on a steady rise, and as people transition back to an endemic world, one might have to look more into the driving and consumer patterns and reliance of cars to have a better stock-take and assessment of the achievability of our ambition of attaining a car-lite society. With the arbitrary limit of the number of cars on the road, and with lower total mileage, but more frequent trips, it will be interesting to see what is installed for our transportation needs.
Consult us at BizLink Rent-A-Car
Keen to learn more about how renting a car can suit your commuting needs but have financial concerns? Our sales associates will be able to guide you through the different points to consider as you embark on your car rental journey.
