Mainstream car COE down 9.2% at S$85,000, lowest level in nearly a year
Slow sales in Jan, plus the Chinese New Year holiday, and an increased COE supply tamped down the premiums
THE first round of Certificate of Entitlement (COE) bidding in February saw the premiums for most motor vehicle categories drop, with that of mainstream cars falling by the most.
The premium for mainstream cars dipped by 9.2 per cent or S$8,601 to S$85,000. It is Category A’s lowest price in nearly a year, with the previous lower price of S$83,000 recorded in March 2024’s first round of bidding.
The Category A COE applies to mainstream cars with engines of up to 1,600 cubic centimetres (cc) in capacity or with up to 97 kilowatts (kW) of power, or for electric vehicles (EVs) with up to 110 kW of power.
The large car category, B, fell 4.7 per cent or S$5,521 to S$111,104.
The Category B COE is for cars with engines of more than 1,600 cc in capacity or that have more than 97 kW, or for EVs with more than 110 kW.
Category C, used for commercial vehicles and buses, went down 4.5 per cent or S$2,970 to S$62,506.
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Category E, the open category which can be used to register any type of motor vehicle except for motorcycles, decreased by 4.4 per cent or S$5,112 to S$110,000.
Category D, used for motorcycles, was the only category to post an increase in this round of bidding. It rose 7.4 per cent or S$568 to S$8,289.
New Year cheer
Ng Choon Wee, the commercial director for Hyundai distributor Komoco Motors, said that the drop in Category A’s premium was caused by weak demand as a slow Singapore Motorshow 2025 was followed by the Chinese New Year holidays.
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In 2024, the lower COE premiums going into the motorshow drove a huge spike in premiums – by nearly S$27,000 in the case of Category B.
The opposite happened this year: Multiple dealers told The Business Times that high COE premiums spelt slow sales at the event, which ran from Jan 9 to 12.
That, coupled with lower showroom footfall and orders in the past two weeks, gave dealers smaller backlogs of orders, so there was less pressure to secure COEs quickly, said Ng.
Slow sales have coincided with a period of increased COE supply as well.
The February-to-April period has an increased supply of COEs. The Land Transport Authority (LTA) announced in January that the overall COE supply for the period ending April would be 8 per cent higher, at 17,133; the supply for categories A, B, C and E grew by about 10 per cent over the same period.
This quota period is also the first to include part of the LTA’s additional injection of 20,000 COEs, to be disbursed over the next few years.
“The number of Category A bids is roughly the same as in the previous round. So taking slow sales and more supply into account, my conclusion is that bidders are behaving more calmly and more rationally,” said Ng.
Great expectations
Observers said that there is also the sentiment that things may improve for the industry ahead of the general election (GE) that is due by November 2025.
The sales director of a mainstream car brand told BT that even if the GE is held in May, as some pundits have predicted, there is still time for the government to ramp up the supply of COEs, as the current COE quota period ends in April.
“We might get more ‘election goodies’. This is only the first round with an increased quota and with (part of the) 20,000 COE injection. (The government) will need to show that supply is increasing,” he said.
Rule changes could also be announced at Budget 2025 later this month.
Ng Lee Kwang, board advisor for Goldbell Group, said: “Transport is an important pillar of Singapore. I think whatever (the government) can do to bring COE prices down before the GE, (it) will do it. People are also waiting for something to be announced at the Budget, such as a separate COE category for private-hire cars.”
Automotive consultant Say Kwee Neng said that while the factors of slow sales and an expected supply increase were in play in the preceding round, the fall in February’s first round was more pronounced. Macroeconomic factors could also be in play.
“Perhaps the market is anticipating something from the Budget announcement on Feb 18. I think the additional COEs may have given consumers pause, but the bigger reason is probably the state of general unrest in the market because of the chaos arising from the trade policies of the second Donald Trump administration,” he said.
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