COE prices end mixed

Clara Chong JY: Morning rush-hour traffic on the Pan-Island Expressway (PIE) outside the St Andrew's Village, just after the Jalan Toa Payoh (left), heading eastward.
Clara Chong JY: Morning rush-hour traffic on the Pan-Island Expressway (PIE) outside the St Andrew's Village, just after the Jalan Toa Payoh (left), heading eastward. PHOTO: ST FILE

Certificate of entitlement (COE) premiums were a mixed bag at the latest tender yesterday as a number of factors influenced bidding.

The premium for cars up to 1,600cc and 130bhp fell 3.4 per cent to close at a four-month low of $51,506. Motor traders attributed this to weaker buyer sentiment on the back of a gloomier outlook.

The premium for cars above 1,600cc or 130bhp crept up 0.9 per cent to end at $57,002. Car dealers cited the launch of the new Mercedes-Benz E-class - a popular luxury car - as one reason for the rise.

"Buyers in the segment are also less price-sensitive," noted Mr Nicholas Wong, general manager of Honda agent Kah Motor.

The commercial vehicle premium closed 3.7 per cent higher at $49,801 as the effects of a smaller supply wore on. As fewer vehicles were scrapped, the August-October COE quota is 23 per cent smaller than the previous one. This, dealers said, offset the effects of weaker sales.

Likewise, the motorcycle premium inched upwards by 1.6 per cent to hit a five-month high of $6,452. The motorbike COE quota has shrunk by 9.6 per cent.

The price of the Open COE, which can be used for any vehicle type but ends up mostly for bigger cars, was 0.1 per cent lower at $56,889 .

GLOOMY OUTLOOK

The economy is not doing well. Now with Zika, tourist numbers will be down too.

'' MR NEO NAM HENG, chairman of diversified group Prime, who said there is a general weakness in the car market.

COEs in this category are transferable, and are often clinched by speculators who resell them at a profit. The fact that their premium has ended lower twice in a row - despite a 17 per cent shrinkage in supply - shows bidders are bearish.

Mr Neo Nam Heng, chairman of diversified group Prime, said there is "a general weakness in the market" - despite a three-week gap between this tender and the previous one, which typically allows dealers to collect more orders than the usual two-week gap.

"The economy is not doing well," he said. "Now with Zika, tourist numbers will be down too." Christopher Tan

A version of this article appeared in the print edition of The Straits Times on September 08, 2016, with the headline 'COE prices end mixed'. Print Edition | Subscribe