Passenger car COEs soar by up to S$27,000 after recent lows and motorshow demand
Derryn Wong
PRICES for passenger car Certificates of Entitlement (COEs) shot back up in January’s second round of bidding, spurred by demand generated by the Singapore Motorshow and recent lows seen in January’s first round of bidding.
Category B saw the largest increase, shooting up 31.7 per cent or S$26,990 to S$112,000.
Category B is reserved for larger or more powerful cars with engines of more than 1,600 cubic centimetres (cc) in capacity or more than 97 kilowatts (kW) of power, or for electric vehicles (EVs) with more than 110 kW.
The price for Category A rose 25.5 per cent, or S$16,579 to S$81,589.
The Category A COE applies to mainstream cars with engines up to 1,600 cc in capacity or up to 97 kW of power, or for EVs with up to 110 kW.
COEs for all other categories remained relatively stable.
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The price for Category C, applicable to commercial vehicles and buses, had a 0.6 per cent or S$402 increase to S$68,001.
Prices for Category D, used for motorcycles, increased 2.1 per cent or S$195 to S$9,309.
Category E, the open category which can be used to register any type of motor vehicle except for motorcycles, increased by 2.5 per cent or S$2,616 to S$109,004.
Category B activity ‘a bit crazy’
Industry observers and car dealers The Business Times spoke at the Singapore Motorshow 2024 – which ran from Jan 11 to 14 – said that low COE prices had spurred major buying interest and that they expected prices to rise as a result.
Charmain Kwee, the executive director of the multi-brand dealership Eurokars Group, said that the drop in COE prices in early January together with the motorshow was a “large contributing factor” to this round’s COE spike.
“The show was more crowded than last year’s, and we saw a larger number of car shoppers willing to purchase. But the low COE prices definitely sparked overall demand, as our showrooms also had healthy traffic as well,” she said.
Singapore University of Social Sciences Associate Professor of economics Walter Theseira said that the news on huge COE price drops “definitely encouraged people to look more seriously at cars”.
“There were real price differences introduced by dealers incorporating lower COE prices into their packages, so that is probably the main cause of why bookings went up,” he said.
Industry observers said that the larger rise in Category B as compared to Category A indicated that luxury buyers are more willing to spend, but mainstream car buyers are still holding back.
Prof Theseira said: “I think the mass markets still aren’t coming back yet, they know it’s still not their time yet.”
Ng Choon Wee, the commercial director of Hyundai distributor Komoco Motors, said he had expected COE prices to rise, but Category B’s return to the S$110,000 level was beyond his expectations.
“Category B going beyond S$110,000 is a bit crazy, I think. It’s driven by luxury brands as mainstream buyers have not really rushed back into the market yet,” he said.
Observers told BT that luxury German brand BMW appeared to do brisk sales at the show.
Kwee said that business for the group’s BMW dealership, Eurokars Auto, was “very good” both at the motorshow and in the showroom, although she declined to give specific figures.
With a healthy backlog of orders built up by some dealers, industry observers said that the fulfilment of those orders would shape COE prices in the next few rounds.
Prof Theseira said that dealers may have sold many “non-guaranteed” packages with substantial discounts on the expectation they would not bid very aggressively for them.
A non-guaranteed package refers to the car and COE priced together, where the car dealer will bid for a COE at a certain price level for a certain number of rounds, but the customer is required to top up the difference if it cannot be secured.
“So over the next few bidding cycles, we’ll see the dealers try to clear such non-guaranteed packages, maybe come back to the buyers and ask them to top up their prices, so there may be some volatility for a while yet,” he added.
Komoco’s Ng also pointed out that the COE quota announcement for the next quota period from February to April would also influence COE prices, and he expected the quota to be similar to the current period’s.
In 2024, the Land Transport Authority (LTA) is continuing its policy of bringing forward guaranteed de-registrations to bolster supply through its cut-and-fill policy.
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