Passenger car COE premiums fall
Distributors say prospective buyers are still in wait-and-see mode, awaiting fall in premiums
Singapore
PASSENGER car certificate of entitlement (COE) premiums fell on Wednesday, amid what appears to be an industry-wide slump in demand for new vehicles.
Nicholas Wong, the general manager of authorised Honda distributor Kah Motor, said bookings have been weak as COE prices remain beyond the "comfort level" of many prospective buyers.
Category A, for cars below 1,600cc and 130 hp, fell by S$1,690 to S$55,399; Cat B, for cars above 1,600cc or 130 hp, shed S$2,100 to S$60,001.
But Cat E, the open category which currently tracks Cat B, climbed S$290 to S$61,300.
Elsewhere, Cat C, for goods vehicles, was S$1,512 lower at S$45,289; Cat D for motorcycles slipped S$354 to S$6,158.
The managing director of a Japanese dealership said: "Generally, the whole market is soft. Many people are still waiting for prices to fall further."
He said most customers are looking for a good buy and resist signing on the dotted line because they are confident that premiums will eventually fall.
"Even when we assure them that we will reimburse any difference in COE if it falls, they won't bite," said the managing director.
But now that premiums have fallen, dealers foresee customers returning to the showroom.
Kah Motor's Mr Wong said: "I expect this weekend to be busy."
"After the Cat A premium dropped to the S$55,000 level in the second half of July, bookings improved. So it's good that premiums have come down."
But he also expects the Cat A premium to "immediately rebound" at the next bidding exercise - probably by the same amounts it fell by on Wednesday, if the number of bidders does not change significantly.
Mr Wong said: "Anyway, Cat A cannot go up by too much because of the affordability level of mass-market car buyers.
"But Cat B can swing more because luxury car dealers have bigger margins."
The managing director said: "As it has happened many times before, prices will probably yo-yo after this."
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Transport & Logistics
S&P slashes Boeing credit outlook as rating hovers above junk status
Honda to spend US$11 billion on EV strategy in Canada
India’s IndiGo gets into long haul game with Airbus A350 deal
Hertz reports US$392 million loss as it unwinds Tesla fleet burden
Changi Airport’s Q1 passenger movements surpass pre-pandemic levels
Toyota and Nissan pair up with Tencent and Baidu for China AI arms race