Big car COE prices continue record-breaking run in September to hit S$134,889
CERTIFICATE of Entitlement (COE) prices for September’s first round of bidding on Wednesday (Sep 6) saw prices for more expensive passenger car categories continuing to break records after the new highs set in August.
The price for Category B rose 3.8 per cent or S$4,909 to S$134,889, a new record which eclipsed the previous highs set consecutively in August’s first and second rounds of COE bidding, at S$126,889 and S$129,890, respectively.
Category B is the category for cars with engines of more than 1,600 cc in capacity or with more than 97 kW of power, or for EVs with more than 110 kW.
The price for Category A rose 1 per cent or S$1,000 to S$101,000. It does not exceed the record of S$103,721 set in March 2023, but it is the category’s third consecutive price rise since July’s second round.
The Category A COE applies to mainstream cars with engines of up to 1,600 cc in capacity and with less than 97 kilowatts (kW) of power, or for electric vehicles (EVs) with less than 110 kW.
Category E, the open category, which can be used to register any type of motor vehicle except for motorcycles, increased by 4.6 per cent or S$6,000 to S$137,000, a new record.
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Like Category B, Category E’s previous highs were also set consecutively in August: S$126,201 in the first round and S$131,000 in the second round.
Category E’s price mirrors Category B closely, since it is used largely by car dealers to register Category B cars as it allows them some flexibility in registration because of its three-month validity period.
Prices for Category C, for commercial vehicles and buses, increased 0.1 per cent or S$88 to S$82,889.
Category D, applicable to motorcycles, was the only COE category to fall. It decreased 4.4 per cent, or S$501, to S$10,901. Observers say the expectation of the larger COE quota in the current quota period of August to October could have triggered an uptick in luxury car sales, which would lead to price increases in what is still a relatively low-quota market.
The Land Transport Authority (LTA) announced a one-time COE quota boost in May, while the COE quota for the current quarter of August to October is 5.6 per cent more than the previous period of May to July.
The general manager of a mainstream car brand said that luxury brands BMW and Mercedes-Benz – which are two of the leading brands by sales here – had seen healthy sales in the past months.
Multiple industry observers The Business Times spoke to also said that BMW is aiming to boost its sales figures and market share in 2023, and is pushing its two dealers – who are in competition with each other – to achieve this.
They also pointed out that dealerships could also be clearing a backlog from orders obtained over the past few months, even before the COEs hit their current record prices.
“The quota numbers are already locked in for the current quota period until November,” said the manager, “and we know COE prices are not on a downtrend. So if I was a dealer facing big pressure to deliver sales targets, I would just get on with business even in a difficult COE environment.”
Other industry figures also said that overall, the COE market is still very tight, with pent-up demand from current or ex-car owners waiting for prices to drop, and private-hire vehicle fleets still rebuilding their numbers to meet ride-hailing demand.
Some car dealerships are still facing delivery problems because of continued supply chain issues.
Looking at the big picture, they said, the recent COE quota increases were welcome, but too small to have a significant effect on reducing price pressure.
For comparison, in September’s first round of bidding in 2018, for example, Category B’s price was S$32,001 with a quota of 1,274, or 24.6 per cent of the current price – with a quota nearly triple the size.
“The industry is very, very different than it was five, or even two or three years ago. I hope it isn’t the case, but maybe new records are a new normal for 2023,” said the manager.
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