Malay Gals, 19, Own Peugeot Cars Woh!

Jan 28, 2007
Cheaper prices, so young snapping up cars
By Nur Dianah Suhaimi

OWNING a car used to mean careful budgeting and years of saving.

But vastly cheaper prices, fuelled by a bumper crop of certificates of entitlement (COEs), have put car ownership within reach of many young adults, a noticeable number of whom are barely a few months into their first job.

More parents, too, are buying cars for their adult children, some of them settling the bulk of the payment in cash.

Teacher Mazri Misawar, 26, bought his own set of wheels just six months after he started work. He paid $49,000, including COE, for his silver Toyota Vios last January.

Said Mr Mazri: 'I've been wanting to buy a car for a long time. Since cars are so cheap now and the economy is good, I decided to go ahead.'

The Land Transport Authority's decision to release more COEs has helped lower prices. Last September, LTA added 8,520 COEs, which will be released over six months.

In the latest COE tender this month, the COE price for the small car category was $11,881. Back in 1994, the price briefly hit $100,000.

Undergraduate Marc Lim's blue Toyota Altis was paid for by his retiree father, mostly in cash.

Said Mr Lim, 21: 'The car cost about $70,000. Since the bulk is already paid for in cash, my father took a one-year loan.'

Last year, Ngee Ann Polytechnic student Siti Nur Puteri, 19, received a brand-new Peugeot 307 from her businessman father before she even got her licence. Her car cost about $90,000.

This year, her father bought a $70,000 Peugeot 1007, this time for her cousin, Miss Mas Indah Puteri, 19, also from Ngee Ann Polytechnic.

Said Miss Siti: 'We chose the Peugeot because we liked the design. I need a car to get to school.'

Figures by the LTA show a total of 116,849 new passenger cars were registered last year, beating the previous year's record of 109,376.

Many of these new cars are owned by young people, said car agents.

The 10 car agents The Sunday Times spoke to said more young people in their early 20s are buying cars.

Seven said they have seen a 10 to 20 per cent growth in sales compared with five years ago, when COE prices were still relatively high.

Said sales executive Andy Sophian from AutoHub Asia: 'Five years ago, it was rare to see youngsters in their early 20s buying their own cars. But now that cars are cheaper, even those who can't afford want their own car.'

Almost half of those driving the China-made Chery QQ cars here are in their early 20s, said Vertex Automobile, the sole distributor of Chery cars in Singapore.

The 812cc QQ retails for about $31,500 (with COE) and is now the least expensive car available here.

Said Vertex's spokesman: 'The cost of driving a Chery is just slightly higher than the cost of travelling by public transport. It's also cheaper than travelling by taxi, which can cost up to $900 a month.'

Said 27-year-old assistant brand manager Mr Bernard Quek: 'The roads are more congested now, and not only during the peak hours.'

Image Caption: ALTHOUGH THEY ARE JUST 19, Miss Siti Nur Puteri (right) and her cousin Mas are already proud owners of Peugeot cars. Miss Siti's businessman father bought both cars for them. -- WANG HUI FEN

Middle class wage stagnation could lead to social instability

SINGPAORE: Middle class wages have been stagnant in the past 5 years, according to economists, and this could lead to social instability

These concerns were shared at the annual Institute of Policy Studies Singapore Perspectives conference.

Economists believe a US economy slowdown in business and consumer spending may cause problems for Singapore, but as Singapore is tops in the ASEAN resilience index, it should be able to weather external shocks, thanks to a diversified economy and strong Asian demand.

They predict that growth going forward will be above 3 to 5 percent.

The long term growth speed limits for a mature economy was previously in the 3 to 5 percent range.

However, economists are asking who this growth is for. The income of the bottom 30 percent of the population has fallen. What is more worrying is the fact that the majority of Singaporeans in the middle class has only seen about a 1 percent increase in nominal income in the last 5 years.

It is not just Singapore - economists say stagnant wages is a global problem, and the chief reason for this is globalisation.

India and China are introducing a large pool of skilled and unskilled labour to compete with the labour forces of industrialised countries.

Singapore is susceptible to this because of its open economy.

123, 000 jobs were created last year and economists estimate some 70 percent of these jobs went to foreigners.

"With the rate of immigration even among unskilled and semi skilled labour at a rate twice of what we experienced in the 90s, at a rate fastest in the developed world, the question is does this dampen our real wages as we grow? Does the strategy itself dampen real wages and depress real wages at the low and middle end of the spectrums? They are sacred cows but we should step back and think about them," said Yeoh Lam Keong, Vice President, Economic Society of Singapore.

Another reason cited for middle class wage stagnation, is the move by the government to cut CPF employer contribution rates for older workers by 4 percentage points over the last 2 years.

"So if you were a worker in the 50-55 age group, you could have seen your wages fall as much as 10 percent over the last 3 or 4 years. Now with the economy improving, the government could bring that back, the increase is 1 or 2 percent. I'm in support of CPF tinkering but probably it happens far too often, but I think there's probably some justification to look back and think that the restructuring was a bit too aggressive on the CPF side and it has contributed somewhat to a very sandwiched middle class," said Chua Hak Bin, Director, Asia Pacific Econ & Market Analysis, Citigroup Global Markets Singapore.

The government is looking at increasing CPF by 1 to 2 percent in 2007.

Economists say workfare should become a more permanent pillar of the economy so as to cushion growing inequality.

Adding that long term middle class wage stagnation could lead to social instability. - CNA /dt

ST: F&N chairman's retirement payout was $4m instead of $3m

State-linked Singapore investment company Temasek Holdings has acquired a 14.9 percent stake in Fraser and Neave (F&N) for 900 million Singapore dollars (588 million US), the food and beverage maker has said. Friday December 8

Jan 6, 2007
F&N chairman's retirement payout was $4m instead of $3m
Wrong figure had been disclosed in last year's annual report
By Lee Su Shyan, Companies Correspondent

IT TURNS out that the bumper retirement gratuity paid to Fraser & Neave (F&N) non-executive chairman Michael Fam was actually $4 million, not $3 million as disclosed by the firm last year.

F&N said the wrong figure was inadvertently published in last year's annual report.

It also emerged that Mr Fam earned more in the year to Sept 30 than in the previous year - even though he retired from the top job a third of the way into the year.

Mr Fam, 79, stepped down as executive chairman in January last year but stayed on as non-executive chairman and as a consultant to the company.

The retirement payout, which was part of his contract, was for 23 years of service to the beverage, property and publishing group.

It was paid in January last year, but last year's annual report contained only the $3 million figure, while the extra $1 million appeared in the company's just-released annual report.

The latest annual report said Mr Fam received between $2.75 million and $3 million in total pay.

This comprised salary, which covered part of the year when he was still executive chairman, director's fees and fees for being a consultant to F&N. This is in addition to his retirement gratuity.

The previous year, he received between $2.25 million and $2.5 million in salary, bonus and fees.

Despite having retired from his duties as an executive chairman, he still remains the most well-paid director on the board.

Dr Han Cheng Fong, the former managing director who took on the post of group chief executive in February last year, was paid between $2 million and $2.25 million for the year ended Sept 30.

At last year's annual general meeting (AGM) in January, Mr Fam told shareholders that he was remaining as chairman and consultant to ensure a smooth transition. A search was launched for his successor.

But he will remain as non-executive chairman for the time being, at the request of the board, to oversee the entry of Temasek Holdings as F&N's second-largest shareholder. The search for a successor is still ongoing, according to F&N.

As a result of the Temasek deal to take up a 14.9 per cent interest in F&N, announced last month, the F&N board will swell to 11 or possibly 12 members.

Temasek is to get two board seats. One will go to Temasek's executive director, Mr Simon Israel. It is not known if Temasek will nominate another director for its second board seat.

Temasek's entry to the business will help spur the growth of the food and beverage businesses, for products such as the famed Tiger Beer, soft drinks and other beverages such as milk.

Already, F&N's unit Asia Pacific Breweries has increased the number of breweries from 24 last year to 29.

For the last financial year, food and beverage's revenue increased 3.5 per cent to $1.9 billion. The division's profits rose 10 per cent to $85.6 million, representing 29 per cent of F&N's total profits before exceptionals of $295 million.

F&N's share price rose 20 per cent over the financial year, exceeding The Straits Times Index's rise of 11 per cent over the same period.

F&N's AGM will be held on Jan 25.

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Mr Michael Fam's total remuneration for the year ended Sept 30 was between $2.75 million and $3 million. This amount is in addition to his retirement gratuity.