Unsustainable love affair with cars

 

Nungsari Radhi, fz.com 

 

ALTHOUGH the frequency has been somewhat reduced in the last few years, I still use the North-South Expressway quite often, especially the Kuala Lumpur to Penang stretch.

 

Most of the time, I drive alone as I enjoy the solitude with time to think for a few hours while navigating the traffic on the highway. However, it is now no longer therapeutic to drive.

 

The last few trips to Penang were rather stressful and the driving experience has gradually deteriorated over the years. 

 

My last two KL-Penang trips took about 7½ hours each. Based on a journey of 350km, the average speed was well below 50kph. That is just horrible on a highway.

 

Speed, therefore, is not the issue on our highways. On the contrary, the problem, in my view, is the lack of speed. I can attest to the fact that over the years that I have been driving on the highway, drivers have generally become slower and to some extent, this has contributed to the highways getting jammed up.

 

Commercial vehicles are regularly seen passing slow-moving cars, slowing traffic down even more as these big vehicles have to cut into the overtaking lane.

 

Of course, there is also the problem of slow-moving traffic blissfully occupying the overtaking lane. These drivers should be fined by the traffic police.

 

The real problem, however, is the explosion in the number of cars on the highways, in particular, small-engine cars. You hardly see the bigger, high-performance cars on the highways. Those who have money buy cars for prestige, not mobility or even performance.

 

Those who can barely afford a car are those who are buying a means of transport. The growth in this group has been facilitated by loose credit, a low interest rate regime and the extension of the repayment period. This is the group that represents real demand for transport. 

 

They may have chosen private transport because of the absence of public transport, but in doing so, their discretionary consumption is reduced considerably and they get themselves into debt. 

 

In all likelihood, their personal or household balance sheets will show negative net worth and continue to do so unless their future income rises sufficiently. A car, unfortunately, is a depreciating asset.

 

Malaysia is on an unsustainable path with this love affair with cars. Car sales have been burgeoning — exceeding 600,000 vehicles a year — and created dependence on many fronts. The car market has grown at a compound rate of over 6% over the last 30 years.

 

Banks that extend credit, insurance companies that offer coverage, the government that collects taxes and the various dealers who sell and service the cars are all dependent on the trend continuing. There is therefore strong resistance to change.

 

In addition, the government subsidises pump prices — RON95 is currently at about 75 sen per litre. At a 50kph crawl on the highway, the consumption must be quite high, say,  eight litres per 100km or 28 litres per KL-Penang trip, implying a government subsidy of RM19.60 per car per trip. 

 

A back-of-the-envelope calculation based on 50kph and about one car distance between cars show there must have been about 17,500 cars on my recent trip or a total subsidy of RM343,000. And that’s just for that one trip, which was on a Sunday during the year-end school holidays. The pressure on our fiscal deficit therefore remains high.

 

The point here is that something has to change. In this case, car sales cannot keep growing at the rate they have over the last three decades. Cars cannot keep clogging up the roads and highways everywhere while consuming increasing amounts of subsidies and contributing towards higher household debt.

 

We cannot be building more roads and highways. Some hard decisions have to be made and in doing so, trade-offs have to be accepted. Whatever the decision, it involves pain of some sort to some party. Indecision because we want to avoid pain is not an option as when the day of reckoning comes, many more will be affected.