COE premiums mixed in 1st tender for period with fewer COEs

Singapore

CERTIFICATE of entitlement (COE) premiums were flat in the first tender of the August-to-October quota period, which has 10 per cent fewer COEs.

Two categories inched up, and the other three slipped.

Category A, for cars below 1,600cc or 130 hp, fell S$497 to S$52,503; Cat B, for cars above 1,600cc and 130 hp, rose S$395 to S$57,903.

Cat E, the open category which currently tracks Cat B, climbed S$700 to S$58,201.

But Cat C, for goods vehicles, and Cat D for motorcycles were lower, down S$1,588 to S$48,302 and down S$96 to S$6,206 respectively.

There will be 25,843 COEs from August to October, 10 per cent fewer than in the preceding May-to-July quota.

All five categories will suffer a cut in COE numbers during this period due to there having been fewer vehicle deregistrations; in the case of the passenger-car categories, the increase in the COE revalidations of older cars is the reason for the shortfall.

There are 4,016 Cat A COEs a month, down 9.4 per cent. Cat B COEs number 2,672, or 8.6 per cent fewer. Cat E has 857, a 16.6 per cent reduction. Cat C falls 23.2 per cent to 350 COEs monthly, and Cat D is down 9.6 per cent to 718.

However, the quota contraction did not cause premiums to spike.

Some dealers attributed this to the usual mix of reasons - resistance to premiums perceived to be higher than they should be and caution amid the slumping economy.

Nicholas Wong, the general manager of authorised Honda distributor Kah Motor, noted that the industry's total number of bookings has not changed much, mainly because of negative buyer sentiment, especially in Cat A, which is mostly made up of replacement buyers.

"I think we have hit the resistance level for this group," he said.

He added: "Those who need to change cars would have already done so. Those who haven't bought yet and can wait a bit longer are still holding out for a lower COE premium."

The rise in the Cat B premium likely came from the arrival of new models; the Mercedes-Benz E-Class, for example, was launched last week.

The manager of a mid-sized Japanese dealership lamented the "very slow" market.

"Walk-in traffic has dropped by 50 per cent from two months ago, when the Cat A premium shot up by S$6,000,'' he said.

He added: "Mass-market buyers are scared. They are worried about their job security and whether to commit to a big-ticket item at this point in time."