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More COEs for small and big cars in Feb-April quota
THERE will be more small and big-car COEs from next month, but the good news about there being 18.3 per cent more certificates of entitlement (COEs) will be tempered by the fact that the annual vehicle growth rate will be halved to 0.25 per cent.
The quota for February to April 2015 will be 14,114 COEs, or almost a fifth more than the previous November 2014-to-January 2015 quota.
Category A, for cars below 1,600cc and 130 hp, gains the most in the next quarter; 1,973 COEs will be available per month, or an additional 41.3 per cent.
Cat B, for cars above 1,600cc or 130 hp, will have 1,444 COEs monthly, or an extra 26.9 per cent.
Cat C, for goods vehicles and buses, gets a reprieve with an additional 30.9 per cent in COEs - 369 pieces monthly.
The number of Cat C COEs had contracted sharply in the previous quarter because of the success of the Early Turnover Scheme, or ETS, which allows commercial vehicles to be registered directly without bidding for a COE.
Cat D, for motorcycles, will decrease by 10.1 per cent to 570 COEs monthly.
But the biggest loser in the new quota is Cat E, the open category, which will shrink 33.8 per cent to 349 COEs monthly.
This is so because from February, only 10 per cent of COEs from deregistered vehicles in each of the categories A to D will go into forming the COE quota for the open category. It used to be 15 per cent.
The Land Transport Authority said that the aim of this is to maintain a more stable supply of COEs in each COE category - while the lower annual vehicle growth rate is in force - by returning more COEs from deregistered vehicles to their respective categories.
The director of a Japanese dealership said he hopes passenger car COE premiums will go south with this quota increase, although he does not feel confident this will happen.
He said: "We sense a lot of pent-up demand. Many people have been holding back for a long time and they may rush in when the premiums drop, thereby pushing them back up again."
He said that in the motor distributor's view, some softening in the premium is necessary to bring consumers back into the showroom.
"Otherwise, they will continue to wait. Why? Because the government says so," he said, referring to the transport minister's advice to aspiring car owners in March 2013 to defer their decision until the COE supply rises.
The director added: So these prospective car buyers will think to themselves, maybe we can wait for the next quarter.
"It's currently a buyer's market, with distributors going all out to woo customers. And the buyers know that."