CERTIFICATE of Entitlement (COE) prices for the first round of bidding in August rose for all vehicle categories, with two passenger-car categories – Categories B and E – reaching new record highs.

The price for Category A, for mainstream cars, rose 4.5 per cent or S$4,297 to S$99,499.

The Category A COE applies to mainstream cars with engines up to 1,600cc in capacity and with under 97 kilowatts (kW) of power, or for electric vehicles (EVs) with less than 110 kW. Category A did not set a new record, but inched closer back to its last record-high price of S$103,721 set in March.

Prices for Category B rose the most in this round: 7.5 per cent or S$8,888 to S$126,889. This is a new record, handily exceeding the previous all-time high of S$121,000 set in June’s second round of bidding earlier this year.

Category B is the category for cars with engines of more than 1,600 cc in capacity or with more than 97 kW of power, or for EVs with more than 110 kW.

Prices for Category C, applicable to commercial vehicles and buses, crept up 0.1 per cent or S$99 to S$82,100.

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Prices for Category D, used for motorcycles, increased 9.5 per cent or S$1,000, to S$11,501.

Category E, the open category which can be used to register any type of motor vehicle except for motorcycles, went up by 3.4 per cent or S$4,091 to S$126,201. This is also a new high for the category, where the previous high was S$125,000 set in May’s second round of COE bidding.

Category E is most commonly used to register passenger cars that would otherwise fall under Category B, as this is the category which sees the highest COE prices. Both are used to register larger, more expensive cars. Industry observers expressed surprise at the magnitude of the spike, as there were a number of minor, contributing factors but no single, major one in play.

Bids received for passenger-car categories A and B increased significantly to the highest levels seen so far this year. They are used by the industry as an indicator of COE demand.

The number of bids received by Category A jumped 30 per cent or by 221 bids to 949, while the number of bids for Category B rose by 41.7 per cent to 853.

Sabrina Sng, the managing director for Polestar, Lotus and insurance for car dealership group Wearnes Automotive, said: “You can see that there is a sudden and obvious increase in demand this round, but no clear reason why.”

She also said that for Category B, there were around 80 per cent more bids received than the quota number, whereas a typical COE round would pull in only around 30 per cent more.

“We did expect prices to rise because of the break, but I don’t think anyone expected new records to be set again,” said Sng, referring to the three-week break between July’s second round of bidding and August’s first. This meant more orders for dealers to clear, a situation that typically results in a mild COE price increase.

As reported by The Business Times when there was a similar three-week break in June, when passenger-car COEs all rose, elevated COE prices lead to pent-up demand, as current and potential car owners hope to wait out the high COE prices.

Sng also pointed out that a number of EV launches – including those from mainstream Chinese brands BYD, Maxus and Ora – and the fact that there has been no announcement on the extension of EV incentives, could have encouraged some consumers to sign on the dotted line earlier rather than later.

Other industry figures said it was business as usual in July and August, and that there were no obvious signs of heightened consumer activity.

“I’m seriously scratching my head right now, as there have been a number of car launches, but no major models. Showrooms and roadshows had decent traffic, but it’s been nothing out of the ordinary,” said the general manager of a major car parallel importer.

Like others in the automotive industry, they had expected a small price increase, but no major jump, especially for Category B and E. As reported by BT, the ultra-luxury car category has slowed down since May, after the effects of additional tax increases.

“Based on my observations, I thought the S$120,000 level was the peak, at least for the consumer market. But somebody proved me completely wrong,” said the manager.