Car COEs hit the brakes

Potential buyers at the Kah Motor Singapore showroom on Feb 11.
Potential buyers at the Kah Motor Singapore showroom on Feb 11. PHOTO: BERITA HARIAN

Certificates of entitlement (COE) for cars dipped in the latest tender yesterday, pointing to private-hire players easing off in their race to garner market share.

COE for cars up to 1,600cc and 130bhp dipped by 2.9 per cent to end at a four-month low of $50,000. COE for cars above 1,600cc or 130bhp slipped by 2.6 per cent to finish at $55,501, also a four-month low.

Open COE, which can be used for any vehicle type but ends up mostly for bigger cars, fell by 3 per cent to reach a three-month low of $55,201.

Motor industry players reckon private-hire players such as Uber-owned Lion City Rental have scaled back their ambition to put out as many vehicles as possible.

Mr Neo Nam Heng, chairman of diversified motor group Prime, said the government indicating recently that it would look into plugging potential loopholes which allow buyers to bypass car loan rules if they register a private-hire vehicle instead of a normal car might have also cooled the market.

Mr Neo noted that private-hire firms are facing a dearth of hirers, as the vehicle return rate is as high as 40 per cent, and "many carparks are filled with these cars".

"Many hirers are also tertiary students on holiday," he said. "When school starts, they'll give up driving."

Mr Neo said COE premiums will "weaken further" once the playing field for taxi operators and private-hire firms is made more level in the coming months.

Taxi firms have been facing an exodus of cabbies who find the rules and requirements of driving a taxi relatively onerous.

Meanwhile, commercial vehicle COE inched up by 0.2 per cent to end at $49,890.

Motorcycle premiums crept up by 0.8 per cent to hit a five-month high of $6,501.

The Singapore Motor Cycle Trade Association said the arrival of several new models, including the popular China-made Honda CB190, contributed to this.

CHRISTOPHER TAN

A version of this article appeared in the print edition of The Straits Times on September 22, 2016, with the headline 'Car COEs hit the brakes'. Print Edition | Subscribe