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PREMIUMS for passenger car certificates of entitlement (COE) fell significantly on Wednesday on, some dealers said, a combination of poor economic sentiment and buyers' hopes for a bigger COE quota in February 2016.
Category A, for cars below 1,600cc or 130 hp, slipped S$2,211 to S$56,989; Cat B, for cars above 1,600cc and 130 hp, was S$1,102 lower at S$60,001. Cat E, the open category which currently tracks Cat B, shed S$2,016 to S$60,003. Only Cat C, meant for goods vehicles, was higher, rising S$2,211 to S$48,101. On the other hand, Cat D for motorcycles went largely unchanged, dipping just S$1 to S$6,501.
The sales director of a luxury dealership said: "Orders in recent weeks have not been strong. It seems that those who wanted to buy have already bought their cars, most of them at last month's TheCars@Expo."
He was referring to the mega vehicle sales event organised by Singapore Press Holdings. According to the him, prospective buyers are either spooked by the prospect of an economic downturn, or are holding back because they expect the next COE quota for the February-April 2016 period to be bigger.
The current November-January quota shrank by 0.9 per cent from the preceding August-to-October quarter, breaking from four successive quarters of COE increases.
But Ron Lim, general manager of authorised Nissan distributor Tan Chong Motor Sales, believes prospective buyers are also staying away because "the last jump was too big for them to stomach".
In the previous tender, the second COE bidding exercise for November, the Cat A and Cat B premiums spiked by S$3,199 and S$3,602 respectively.
He added: "There is also no rush for COEs from dealers because those who had to meet their annual sales targets have already done so."
Another factor is the quiet market. The December school holidays is a period when most people are away for their year-end break.
Referring to Cat C, where the demand for commercial vehicles is still strong, he said: "The light commercial vehicle segment is picking up, even as the heavy-goods vehicle segment is tapering off."