Fears over another supply cut contributed to double-digit rise, say industry watchers
By
Christopher Tan, Senior Correspondent
The COE price for cars above 1,600cc chalked up a 13.2 per cent rise to reach $16,801. -- ST PHOTO: LAU FOOK KONG
CERTIFICATE of entitlement prices posted double-digit rises on Wednesday to end at their highest levels in over a year. The COE premium for cars up to 1,600cc ended at $14,310, 10.9 per cent higher than the previous mark reached three weeks ago. The COE price for cars above 1,600cc chalked up a 13.2 per cent rise to reach $16,801.
The premium for the open category COE, which can be used for any vehicle type but ends up mainly for cars, rose by 15.9 per cent to $17,501 - the highest since April last year.
But it was the COE price for commercial vehicles which posted the biggest increase. It jumped 33.9 per cent to finish at a 15-month high of $16,888.
Motor traders attributed this sharp spike to a desperate attempt by heavy truck suppliers who had failed to secure COEs in the last few rounds.
The motorcycle premium was the only exception on Wednesday, ending flat at $900, compared to $901 previously.
Industry watchers pointed out that premiums have been rising almost continually since a 24 per cent cut in COE supply took effect in April. Prices now are, on average, double what they were in April. Those interviewed said nervousness over another supply shrinkage that could kick in from October had contributed to the aggressive bidding and, consequently, Wednesday's results.
The strong bidding does not necessarily reflect stronger demand for cars.
According to Land Transport Authority statistics, 4,775 bids were submitted, 10 per cent fewer than the 5,286 bids three weeks ago. This showed that the number of fresh bookings since the last tender had been either flat or fewer.
'It's definitely not a reflection of the economy,' said Mr Ron Lim, general manager of Nissan agent Tan Chong, adding that there was more urgency among dealers to translate bookings to deliveries 'in these bad times'. He described Wednesday's outcome as 'a massacre' and said it might not be 'sustainable'.
But prices will go up again. Motor traders are expected to raise sticker prices by $1,500 to $2,000 from Thursday.
Read the full story in Thursday's edition of The Straits Times
