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Car COE prices rise in 4th straight bid exercise
CERTIFICATE of entitlement (COE) premiums for passenger cars have risen for the fourth straight bidding exercise, and the premium for motorcycles has hit an all-time high.
Category A, for cars below 1,600 cc or 130 hp, rose S$976 to S$51,765; Cat B, for cars above 1,600 cc and 130 hp, climbed S$700 to S$54,000.
Cat E, the open category which currently tracks Cat B, jumped S$1,500 to S$54,501.
Meanwhile, Cat D for motorcycles rose S$598 to a record S$8,081.
Only Cat C, for goods vehicles, was lower, falling S$1,966 to S$47,036.
Nicholas Wong, the general manager for authorised Honda distributor Kah Motor, said there is no reason for car COE premiums to rise, especially since retail demand has been weak.
To back up his point, he pointed to the number of Cat A and B bids, both of which had fallen by 200 bids each from the previous tender two weeks ago.
He added: "Prices shouldn't be going up with the poor market sentiment, so it must be due to artificial demand."
Some distributors said that private-hire companies may have participated in the bidding exercise as they had witnessed last-minute submissions of multiple bids.
One of them estimated that at least 100 Cat A COEs were secured by one of these companies on Wednesday.
As for the Cat D premium, one motorcycle dealer said the spike could have been the result of the hoarding of "older" bike COEs.
COEs secured before the second bidding exercise in February are exempted from the progressive taxes levied on two-wheelers.
These COEs are valid for six months.
The dealer said that because these previously secured COEs are not being utilised, there is upward pressure on premiums from the usual demand for smaller motorbikes.
"But once the new COE quota comes into effect in May, I believe the Cat D premium will soften," he said.
This is because May is the month when the contribution of 10 per cent of the motorcycle COE quota to the Open category COE quota ends.
The only category to post a drop in premium on Wednesday was Cat C, for commercial vehicles.
One dealer said it was likely due to a combination of the sluggish economy as well as low stocks of some popular makes.
The Euro 6 emission standard for diesel vehicles will be implemented on Jan 1, 2018, and he said the changeover has disrupted the supply of commercial models.
He said: "Some dealers have run out of Euro 5 vehicles and are still waiting to roll out their Euro 6 versions."