Buyers throng car showrooms after COE prices fall to lowest in 8 years

Customers looking at cars at the Kah Motor Honda Showroom on Alexandra Road, on July 7, 2018.
Customers looking at cars at the Kah Motor Honda Showroom on Alexandra Road, on July 7, 2018.ST PHOTO: ALPHONSUS CHERN

SINGAPORE - Car showrooms along Leng Kee Road and Alexandra Road were abuzz with activity on Saturday (July 7), with potential buyers turning up in force.

Dealers told The Straits Times that footfall was between 20 to 30 per cent higher than a regular weekend, and they similarly expect the crowds to flock back on Sunday (July 8).

While most declined to reveal how many orders they received, Tan Chong Motors' head of sales and marketing Ron Lim said that "sales is up more than three times".

Buying interest has been revved up after the Certificate of Entitlement (COE) prices for cars hit their lowest in nearly a decade.

At the latest tender exercise which ended on Wednesday (July 4), the premium for cars up to 1,600cc and 130bhp dipped by 26.7 per cent to $25,000, while the COE price for cars above 1,600cc or 130bhp dropped by 8.6 per cent to $31,000.

Industry players attributed the fall largely to a tightened vehicular emission ruling that took effect on July 1, which resulted in several car models, like the Mazda 3 sedan, being slapped with surcharges.

 

Still, the sustained fall in car COE prices over the last few bidding rounds has allowed dealers to keep prices low. Before July 1, a 1.5-litre Mazda 3 cost $89,000, but it is now going for $80,800 with COE.

 

Mr Jason Lim, 30, a pharmaceutical specialist, said the drop in COE prices has "accelerated" his decision to get a set of wheels, and he intends to place an order in the next few days.

"The prices are very attractive. But at the same time, everyone is out shopping and retailers may be giving out better promotions if we shop around," said Mr Lim, who is eyeing a Japanese make.

Mr Gary Quek, sales manager at Honda agent Kah Motor, said showroom traffic was up by 30 per cent on Saturday (July 4). "Visitors are coming in to find out what packages we offer, and see if they can get a good deal," Mr Quek added.

Because of the lower COE prices, Honda car prices have dropped by between $3,000 and $5,000, Mr Quek said.

Tan Chong Motors' Mr Lim said a Nissan model that has garnered strong bookings is the Sylphy, with prices starting from $79,800. "It is the first time in many years that prices are under $80,000 for a 1.6-litre Japanese sedan," Mr Lim added.

Mr Lim, however, said: "Many buyers have committed but equally many still need time to work out their budgets, as they didn't even think of buying a new car until now."

A senior marketing manager of a car dealership, who declined to be named, was less sanguine with the current buying interest.

He said: "We don't expect people to rush in to buy the cars, as they are still evaluating the impact of the lower COE prices and the tighter emissions standards. Unlike many other dealers, we are not breaking out the champagne just yet."