1,614 more COEs for categories A, B and C vehicles from November to January; observers mixed on price impact
THE Land Transport Authority (LTA) on Friday (Nov 3) announced that it will be reallocating an additional 1,614 certificates of entitlement (COEs) for cars and commercial vehicles from COEs slated to expire in the next projected peak-supply year.
These will be available from November this year to January 2024 and supplements an earlier reallocation announced on Oct 13, which involved 1,895 Category A and Category B COEs from guaranteed deregistrations.
Such COEs were renewed earlier for five years and cannot be revalidated further.
This move was part of an extraordinary adjustment announced in May, under which about 6,000 such five-year COEs would be gradually reallocated over several quarters.
These additional COEs brings the revised quota for the November to January period to 14,388, climbing 27.1 per cent from the 11,319 allocated in August to October this year.
Of the 1,614 COEs, 546 are for Category A vehicles, which refer to smaller, less-powerful cars and electric vehicles (EVs). This brings the category’s total COE quota for the period to 5,513, a 35 per cent increase quarter on quarter.
An additional 863 brings the total Category B COE quota to 3,800, which also reflects a 35 per cent rise from the previous quarter. Category B is meant for bigger and more powerful cars and EVs than those under Category A.
Meanwhile, another 205 was added to the Category C quota, which is for commercial vehicles. The total COE quota for Category C for the period is 1,129, up 65 per cent quarter on quarter.
There is no change to the quota for other categories, said LTA.
Industry observers were mixed on whether this reallocation would bring down COE prices, as private-hire vehicle companies are likely to continue building their fleets before 2024.
Car prices will increase in 2024 independent of COEs, as stricter regulations for vehicle-emissions testing and reductions in existing rebates for the Vehicular Emissions Scheme and EV Early Adoption Incentive kick in.
Sabrina Sng, managing director for Lotus, Polestar and Insurance at dealership group Wearnes Automotive, noted that the reallocation could stop prices from rising further, but there is still the “desperation factor” to buy before January.
“To compare, the one-time quota increase for Category A in October was not enough. We also know that some buyers are holding off because of high prices, and the news of a quota increase may cause an influx of buyers,” she said.
Meanwhile, Ng Choon Wee, commercial director for Hyundai distributor Komoco Motors, pointed out that a minor correction may happen with prices dropping by S$2,000 to S$3,000, as the increase will provide “some stability” for the next three months. “COEs will still remain high, so I do not see a big influx of private car buyers just yet,” he added.
However, Sng noted that the expanded quota does not address the “fundamental issue” of private-hire fleets, which have been key in pushing up COE prices.
A sales director of a mass-market authorised car dealer added: “The problem is we cannot control private-hire vehicle firms from pushing up COE prices, on top of German premium brands dumping prices.”
The LTA said that the COE quota for categories A, B and C will continue to increase in 2024 before reaching the peak supply period from 2025, while the Category D quota – for motorcycles – in 2024 is “expected to remain comparable to 2023”.
