By Christopher Tan
DEMAND for rental cars is revving up, thanks largely to a growing expatriate community and, to a lesser extent, rising tourist numbers.
According to the Land Transport Authority (LTA), there are now about 13,000 rental cars here - 68 per cent more than there were just five years ago.
The rate of expansion is more than double that of the general car population, which went up by 32 per cent in the same period, to 577,000.
Mr Neo Nam Heng, chairman of rental firm Prime Leasing, said: 'In the last five years, our fleet has been growing by about 20 per cent per year. Today, we have 750 cars.'
He attributed the fast growth to a rising number of foreigners in Singapore.
'Our clients are mainly in the oil, gas, marine and financial sectors,' Mr Neo added.
Another firm that has been seeing brisk business of late is Daimler Fleet Management Singapore, which is owned mainly by German carmaker Daimler AG and has more than 200 Mercedes-Benzes in its fleet of 550 cars.
'We didn't suffer much from the financial crisis because most of our cars are on long-term leases to senior executives,' said Daimler Fleet Management general manager Peter Choong.
'These people don't usually get moved around on short notice,' he said.
Mr Choong is also president of the Vehicle Rental Association, whose membership has also grown to 40, from 30 five years ago.
'Singapore is a hub for meetings, conventions and exhibitions. And in recent years, the number of such events has risen. Because of this, so many new limo companies have sprung up,' he said.
Hertz Asia Pacific's fleet in Singapore has also expanded, from 220 units three years ago to 350 today - a 60 per cent increase.
Its general manager Goh Kim Guan said the growth in tourism in 2007 and 2008 was a major reason for this. The company also added cars in anticipation of a surge in tourists after the opening of the two integrated resorts here.
He said relatively low certificate of entitlement (COE) premiums last year also prompted many rental firms to bolster their fleets. Last year's car COE prices averaged between $15,000 and $16,000. They have now shot up to above $25,000.
Fleet operators said an LTA rule change was another reason for the growth in the rental car population. In 2006, the authority changed a three-decade regulation to allow second-hand cars to be used as rentals.
Operators who said this noted that some of the more established companies had not, in fact, increased their fleet sizes. But some used-car operators have converted part of their unsold stocks into rental cars.
ComfortDelGro Leasing's fleet, for instance, has shrunk from 1,252 in 2008 to 1,150 last year. Orix, largely owned by Nissan distributor Tan Chong International, has not grown its fleet of about 1,000 vehicles.
Others which have added to their fleets have done so cautiously. Premier Rent A Car managing director Lim Chong Boo said his company has been tempering growth 'to maintain high service standards'. Its fleet inched upwards to 420, from 380 two years ago.
Perhaps the most bullish new player is Luxe Car Rental, the only company offering supercars.
Since starting up in 2008, the company said business has been growing by 'between 15 per cent and 30 per cent a month'.
From just four cars, it now has nine, including a Lamborghini, a Bentley and an Aston Martin. The company is not stopping there either.
'We are planning to expand our fleet to 15 cars in the near future,' said a spokesman. 'Models such as the Lamborghini Murcielago and Audi R8 are being considered.'
Other firms are also seeking some separation as the market gets more crowded.
Smart Car Rental owner Johnny Harjantho, for one, plans to include three electric cars in his fleet of about 70 from as early as the fourth quarter this year.
christan@sph.com.sg
This article was first published in The Straits Times.
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