IT was no surprise that the second bidding exercise for January saw the certificate of entitlement (COE) premium for small cars rebounding strongly.
Two weeks ago, the small car premium had dipped sharply - by more than S$9,000 to S$45,002. This attracted prospective buyers, who had been hitherto waiting on the sidelines for lower prices, back into the showroom. As a result, Category A for cars below 1,600 cc or 130 hp jumped S$6,299 to S$51,301.
But Cat B - for cars above 1,600 cc and 130 hp - fell S$4,831 to S$50,089, thus making the big car COE more often used for registering luxury models cheaper than the one for bread-and-butter cars.
Cat E - the open category which currently tracks Cat B - also shed S$4,089 to S$51,000. Cat D for motorcycles was also lower, down S$377 from a record high to S$6,512.
But Cat C - for goods vehicles - was up S$4,466 at S$46,502 because of this category's contraction from next month onwards.
Cat C is the only class facing a reduction in COEs for the upcoming February-April 2016 quota. It will be cut by 32.6 per cent or almost a third to 324 COEs per month. The drop is due to the high take-up rate for ETS or the Early Turnover Scheme, under which owners of older diesel vehicles are incentivised to replace them with cleaner Euro V models without having to bid for a COE.
Cat A's increase in premium was also anticipated. George Lee, general manager of the Alpine Group which distributes Opel and Chevrolet, had expected it to be higher. "The Japanese brands did very well among those buyers who had been sitting on the fence," said Mr Lee.
He said there had been a "swift reaction" to the fall in premium two weeks ago, with distributors collecting the bulk of orders during the weekend immediately after the COE results. "List prices had already risen by the time the motor show was held (last weekend)," he said.
As for the Cat B premium's dip, Mr Lee attributed this to the fixation with Cat A models. "Nobody looked at Cat B during the last two weekends because everyone was unbelievably focused on Cat A," he explained.
A senior manager at Cycle & Carriage, the authorised Mitsubishi distributor, agreed. He said "everyone's attention was on the Cat A price drop. They seemed to have totally forgotten about Cat B." However, he added: "Now that it's lower than Cat A, people will remember it again."