[SINGAPORE] COE premiums were largely flat in yesterday's bidding exercise, the first for this month, as both dealers and buyers anticipate lower prices in the coming months.
Category A - for cars below 1,600cc and 130 hp - inched up $91 to $61,990, while Cat B - for cars above 1,600cc or 130 hp - slipped $811 to $64,889.
Cat E - the open category which currently tracks Cat B - fell a more substantial $2,300 to $63,001.
Meanwhile, Cat C - for goods vehicles - rose $1,389 to $43,390, and Cat D - for motorcycles - was $111 higher at $4,001.
"Considering that the previous tender was three weeks ago, the premiums didn't move much," says the sales manager of a Japanese dealership. The usual gap between bidding exercises is two weeks and a longer interval normally allows dealers to collect more orders, thus pushing COE premiums up.
This is notwithstanding the fact that recent demand has been average, he adds.
"The crowds at last Sunday's Carnival were more ready to commit to a purchase than in recent years," he says, referring to the "Cars at Expo" car-mart event organised by Singapore Press Holdings. "One reason is the relatively lower COE premiums. Another is that they can't wait any longer to replace their ageing cars."
But he adds that while some car distributors may have collected a good number of orders, they are not in a rush to fulfil them yet. He explains: "There is an expectation that more COEs will be released soon, so why chase prices up now?"
The next bidding exercise in two weeks' time marks the last one for the May to July 2014 quota before the August to October 2014 quota kicks in. The current quota is about a third larger than the one before it, with a 41 per cent increase in COEs for Cat A and a 38 per cent hike in Cat B COEs.
Many prospective buyers are hoping the new August to October 2014 quota will herald another spike in COE numbers and a subsequent dip in premiums. But some dealers are not so sure.
Extrapolating the deregistration numbers for April and May (June figures are still unavailable), it looks like the next quota may see Cat A COEs increase by 8 to 10 per cent while the Cat B supply could remain the same.
May saw a dip in deregistrations from April but if scrappage bounces back up in June, that could still change.
But the sales director of a volume brand believes those waiting for COE premiums to fall may have to wait a bit longer. "I am not too hopeful about the next quota," he says. "Maybe the following quarter will bring better news."
Details of the new quota are expected to be announced later this week.
Analyse historical COE data with the Business Times' interactive tool at http://btd.sg/coetrack