CERTIFICATE of entitlement (COE) premiums softened across the board on Thursday as bookings for new vehicles dried up, some dealers said.
Category A, for cars below 1,600cc, slumped S$2,899 to S$52,301; Cat B, for cars above 1,600cc, slipped S$921 to S$56,089.
Cat E, the open category which currently tracks Cat B, shed S$1,388 to S$56,002.
As for Cat C, the goods vehicles COE was S$113 lower at S$47,889. Cat D for motorcycles was down S$291 to S$6,012.
The sales manager of a Japanese dealership said that his business was worse in the past two weeks than in the preceding fortnight.
Then, COE premiums had soared by between S$5,400 and S$6,844, leading some popular brands to raise their prices by a corresponding S$6,000.
This had, in turn, caused a sharp slowdown in bookings. "You only had to walk into the showroom to get a sense of how bad the situation was; there was very little traffic," he said, referring to the last two weekends.
He said that most prospective customers were reluctant to buy at the current "high" prices.
But although the Cat A premium has fallen by about S$2,900, he still does not believe things will get better soon. "Even at this new level, I do not foresee demand increasing by much. People are just not coming in at this price point because they believe COE premiums should not be this high."
Meanwhile, the managing director of a luxury dealership said that he had expected the Cat B premium to fall. He added that the gloomy economic outlook was compounding the problem of high prices.
He said: "The business sentiment is very poor. And Brexit isn't helping. My customers are complaining about the falling stock prices and currency rates."
Michael Lim, chief executive of Motorway Group, which distributes Ssangyong, also pointed to the poor economy as a contributing factor to lower demand. "The market is very slow because of the economy."
But with the correction in the Cat A premium, he expects buyers to trickle back into the showroom. "I think the drop is big enough."