Passenger car COE premiums flat as Category A stays above S$100,000
Car dealers bid conservatively ahead of expectations of a quota increase from August
[SINGAPORE] Premiums for the two passenger car categories – A and B – of Certificates of Entitlement (COEs) remained almost entirely flat in July’s second round of bidding, while all other categories posted gains.
The mass-market car category, A, remained the same at S$101,102, while the large-car category, B, dipped just 0.4 per cent or S$499 to S$119,101.
The Category A COE is for 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 Category B COE applies to larger, more powerful cars with engines of more than 1,600 cc in capacity or with more than 97 kW of power, or to EVs with more than 110 kW of power.
The premium for Category C, applicable to commercial vehicles and buses, posted the largest increase in this round: It was up 2.9 per cent or S$1,911 to S$68,600.
The premium for Category D, which is used for motorcycles, rose 1.3 per cent, or S$122, to S$9,511.
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Category E, the open category, which can be used to register any type of motor vehicle except for motorcycles, was up 1.3 per cent or S$1,500 to S$120,000.
Holding back
Industry players The Business Times spoke to said that Category A’s flat premium was due to dealers holding back on aggressive bidding, as the supply of certificates could be increased from August.
COE quotas are announced by the Land Transport Authority in three-month periods, with the most recent being the May-to-July period. It typically announces the quota for the next period – in this case, August-to-October – near the end of the final month of the preceding period.
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Anthony Teo, managing director of BYD distributor and dealer Vantage Automotive, said: “(The industry) is waiting for the next quota announcement, when we expect more quota, so dealers are in no hurry to secure certificates in this round.”
Chong Kah Wei, managing director of Mazda Singapore, said: “I see everyone is expecting that the COE quota is going to be released soon and expecting more quota, so they all held back on bidding.”
But the results reflected the stable demand for mainstream cars.
Vantage’s Teo said that demand for Category A “remained strong, just that it is not increasing from what we saw last round”.
Mazda’s Chong said: “Category A is exactly the same as last time, which is interesting, but the stability was more or less expected. Around the industry, the order books weren’t fantastic over the past two weeks, and the number of bids is similar to the previous round’s.”
The bids received for a COE category are an indicator of demand. The number of bids taken for Category A was 1,874, compared to 1,918 in the previous round.
Other dealers also noted that there were no launches of significant new models for Category A in July, which could have contributed to the stability.
Making waves
While Category B’s premium was stable as well, the situation was different from Category A, in that BYD introduced a plug-in hybrid electric vehicle (PHEVs) to Singapore for the first time on Jul 16, with the Sealion 6 DM-i.
It uses a Category B certificate.
BYD’s most popular model in Singapore is the fully electric Sealion 7, which is similar in price to the Sealion 6. The Sealion 6 has a petrol engine, but can run short distances on its smaller battery that can be charged at EV stations.
PHEVs are not as popular as EVs, but BYD’s new model could increase sales of the vehicle type significantly.
Vantage’s Teo said: “We have done pretty good sales with the Sealion 6 and taken more than 100 orders so far.”
From January to May, 159 PHEVs were registered, compared to 7,837 EVs.
The sales manager of a mainstream Japanese brand who declined to be named said: “The Sealion 6 would be the likely reason Category E went up.”
Category E certificates are typically used to register vehicles from Category B, where the COEs are almost always the most expensive type of non-open COE.
Unlike categories A and B, Category E certificates do not need to be bid for on behalf of an owner or buyer, and stay valid for three months.
The sales manager said that BYD dealers might not have stock of the Sealion 6 yet, or could be waiting to see how demand pans out between the Sealion 6 and 7, so they likely looked to obtain Category E certificates for more flexibility.
The Sealion 6 is priced at S$212,888 with COE, with the Sealion 7 some S$3,000 cheaper.
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