SINGAPORE - Despite a slightly larger supply, certificate of entitlement (COE) prices ended mostly higher at the latest tender on Wednesday, with two premiums setting new records.
The price of the category B COE – for bigger and more powerful cars – finished at $129,890, 2.4 per cent higher than the previous high of $126,889 two weeks ago.
The premium for the Open category COE – which can be used for any vehicle type but ends up mostly for bigger, more powerful cars – hit an all-time high of $131,000, or 3.8 per cent higher than its previous price of $126,201.
The COE price for smaller and less powerful cars finished at $100,000, a 0.5 per cent rise from the $99,499 posted two weeks ago. Likewise, the commercial vehicle COE premium crept up by 0.9 per cent to $82,801, from $82,100.
The motorcycle premium bucked the trend to close 0.9 per cent lower at $11,402, down from $11,501 previously.
There are 5.6 per cent more COEs in the August-October quota period than in the previous three-month period. The increase has largely to do with an extraordinary adjustment announced in May.
In the move, the Land Transport Authority effectively brought forward some COEs from projected peak supply years. In total, 1,025 such COEs were pumped into the current three-month quota – all for cars.
Observers said the increase was too small to make an impact, and that more measures should be introduced to curb the price spiral – such as enforcing car loan restrictions more stringently, applying such restrictions to companies and checking the unbridled growth of private-hire vehicles.
Ms Sabrina Sng, managing director in charge of Polestar and Lotus at multi-franchise motor group Wearnes Automotive, said: “The supply increase is only 5 per cent. And 70 to 80 per cent of bids in the last round were unsuccessful.”
Ms Sng said the rush to meet sales targets remains a driving force, with additional impetus from “impending changes and many unknowns” in 2024. For instance, rebates for the new Vehicular Emissions Scheme have not been spelt out yet. And the EV Early Adoption Incentive scheme is due to end on Dec 31 this year, with no word yet on whether it will be extended.
Mr Neo Nam Heng, chairman of diversified motor group Prime, pointed to heated competition for what is still a small quota. “You see the two BMW dealers fighting for market share,” he said. “And there are many new models launched recently. We hear the new Toyota Alphard and Vellfire had attracted a few hundred orders before their launch.”
Mr Neo said the recovery of the tourism industry is fuelling demand for cars such as the Alphard and Vellfire – plus-size multi-seaters popular with limousine and tour operators.
“The weak Japanese yen is also a factor in the strong bidding for COEs,” he added. “For a car like the Alphard, the seller can enjoy a saving of up to $45,000.”
Mr Neo noted that parallel importers now control some 40 per cent of the Japanese car market, and they pay for their vehicles in yen.
“I think the current COE prices will continue till year end,” he said.
Singapore Vehicle Traders Association president Neo Tiam Ting said: “The demand for private-hire cars is still there. Models like the Toyota Noah, Voxy and Alphard (models currently popular with private-hire operators) are selling well.
“Cars sold for private use are very rare these days.”
