From Bad To Worse For Vehicle Sales

BMI has revised downwards the forecast for Singapore's 2010 vehicle sales again at the mid-point of theyear, as sales of small cars below 1.6-litres are still far below thetrend for previous years. Our revised forecast for new vehicleregistrations in 2010 is for a decline of 18% y-o-y, to a total of88,938 registrations. The base effect should kick in more strongly from2011, alongside a gradual acceleration in economic growth torespectable levels for a developed state in 2011-2014. Sales for H110are still low at 32,334 units, which is 34.8% lower than H109. This isvery much out of alignment with our expectations for a strong surge inGDP growth from 2% in 2009 to 12% in 2010, but we believe there is amore industry specific reason behind this, as consumers shift betweenvehicle segments.

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