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COE premiums fall across the board again
[SINGAPORE] COE premiums fell across the board for the second straight tender yesterday, on continuing weak demand, said some motor distributors.
A Category A certificate of entitlement (for cars below 1,600cc) fell $4,280 to $72,609, while Cat B (for cars above 1,600cc) were $3,332 lower at $84,578 and Cat E (the open category currently tracking Cat B) slipped $3,288 to $89,001.
Cat D (for motorcycles) was down $94 at $1,710.
But it was the sharp 18.4 per cent fall in Cat C (for goods vehicles) that was the biggest adjustment in yesterday's bidding exercise. It dived $12,499 to a seven-month low of $55,503.
One commercial vehicle dealer said dealers who had been aggressively clearing their existing stocks of heavy goods vehicles to beat the new 2014 emission standard have mostly finished doing so. New commercial vehicles have to be Euro 5-compliant from January next year.
He added that another reason for Cat C's plunge was that the recent strong orders for cement mixers and other heavy vehicles involved in the construction sector had been filled.
As for the passenger car market, the sales manager of a European dealership pointed to the weak overall market stemming from loan curbs and higher registration taxes introduced in February this year.
Some dealers said they were still doing steady business in less expensive, entry-level models. But those in the luxury sector are generally feeling the pinch.
"Of course you still have cash-rich individuals buying cars but for a lot of other people, affordability is an issue with the mandatory 50 per cent cash downpayment,'' said the sales manager. "It has taken a while but we are definitely seeing the vehicle financing restrictions starting to hurt buyers.''
He added that yesterday's slump in COE premiums did not come as a big surprise because it was a "timely correction''.
"The sharp increases in late September and early October were overdone,'' he explained. "Premiums rose too high and too quickly without corresponding real demand, especially when there aren't many new Cat B models to entice people.''