COE supply shrinks again for the next three months

Potential car buyers at Borneo Motors’ (Toyota) Leng Kee Showroom.
Potential car buyers at Borneo Motors’ (Toyota) Leng Kee Showroom.PHOTO: ST FILE

Buyers can expect fewer certificates of entitlement (COEs) for the November-to-January quota period.

The Land Transport Authority announced yesterday that there will be an average of 8,075 COEs per month for the next three-month period, down 6.2 per cent from 8,613 for the period from August to October.

There was a 7.1 per cent decrease in the number of vehicle deregistrations, the main driver of fresh COE quotas, resulting in a more modest reduction compared with the 10.6 per cent drop from the May-to-July period to the current period.

This continues the trend of contraction from the current three-month period, following a series of expansions earlier in the year.

The monthly COE quota for cars up to 1,600cc and 130bhp will dip by 8.2 per cent to 3,688. For cars above 1,600cc or 130bhp, the quota will go down by about 7 per cent to 2,486 a month.

There will be 799 COEs a month in the Open category, or a drop of about 6.8 per cent.

Opinions are split as to how the smaller supply will affect COE premiums in the coming months.

In the light of the current gloomy economic outlook and the stronger Japanese yen, Mr Neo Nam Heng, chairman of diversified motor group Prime, said: "The impact (on COE prices) will not be great."

He added that COE premiums are likely to stabilise as the private-hire sector becomes more saturated.

A large number of bids from private-hire fleets powered an increase in COE premiums earlier this year.

Mr Eddie Loo, managing director for new- and used-car dealership CarTimes Automobile, however, said that premiums are unlikely to go down as there is still a significant demand for cars.

Bucking the trend, there is a slight increase of 3.1 per cent for commercial vehicles, which will have 361 COEs a month.

For motorcycles, the supply of COEs will also grow from 718 to 741 a month, a 3.2 per cent increase.

A version of this article appeared in the print edition of The Straits Times on October 13, 2016, with the headline 'COE supply shrinks again for the next three months'. Print Edition | Subscribe