Circuit-breaker extension will hit transport, motor trade sectors hard
Public transport ridership expected to fall further as more firms close, car dealers incurring storage costs
The extension to circuit breaker measures could have a devastating impact on the motor trade and transport sectors, both of which are already reeling from a downward spiral in demand.
Public transport ridership, which has plunged by as much as 75 per cent after heightened safe distancing measures kicked in on April 7, is expected to fall further.
This is because more businesses will now close or institute work-from-home arrangements for employees after Prime Minister Lee Hsien Loong announced on Tuesday that the circuit breaker period will be extended from May 4 to June 1.
The point-to-point transport industry with a fleet of 75,000 taxis and private-hire cars saw demand shrinking by as much as 60 per cent after tourist arrivals started falling when the coronavirus outbreak reached Singapore in January.
Singapore University of Social Sciences transport economist Walter Theseira said the point-to-point transport sector "could be looking at a medium-term structural correction".
"I think there is a good chance tourism cannot recover for many months," he said.
He said that even if the economy returned to a more normal state, "there's no way" the volume of visitors will bounce back to pre-pandemic levels quickly.
Prof Theseira, who is also a Nominated MP, said the structural correction will address an oversupply of vehicles.
"We probably have too many private-hire cars now," he said. "This wasn't helped by many small-scale rental car agencies getting into the market."
Observers said bus and train operations will sink further into the red this year, which could entail more government subsidies.
Meanwhile, car dealers are facing a mounting inventory of vehicles sitting at the port and third-party facilities, incurring storage costs.
Car sales ground to a halt when stricter safe distancing measures started two weeks ago. Sales will continue to be suspended up till at least June 1.
The Land Transport Authority, which suspended certificate of entitlement bidding and other vehicle-related activities for April, has not announced the next course of action.
"We are reviewing the impact of the extension of the circuit breaker period on vehicle-related matters and will update motorists soon," it said yesterday evening.
In a separate development, taxi giant ComfortDelGro will extend its full rental waiver to its cabbies by another month.
In a statement yesterday, the listed home-grown company with the largest fleet of cabs - about 10,800 taxis or 59 per cent of the total - said it expects its total relief package to its hirers will amount to as much as $116 million. It expects this to pull its once lucrative taxi business into the red for the first time this year.