SINGAPORE - Certificate of Entitlement (COE) bidding exercises will resume, with the first bidding exercise starting on July 6.
The COE quota for the bidding exercises in July will be 8,737.
COE quota from the suspension of bidding will also be gradually returned to the market, the Land Transport Authority (LTA) said in a statement on Thursday (June 18).
Motor vehicle dealerships and showrooms will also be reopening from Friday (June 19), the first day of Singapore's phase two of reopening after the Covid-19 circuit breaker ended on June 1.
Motor dealers will resume operations, including test drives by prospective vehicle buyers.
Dealers and vehicle buyers will have a two-week period to plan and confirm vehicle purchases before the COE bidding exercises resume.
Thereafter, COE bidding exercises will resume according to the schedule before the circuit breaker, opening on the first and third Mondays of each month.
The accumulated COE quota of 19,490 from the suspended bidding exercises from April to June due to the circuit breaker will also be returned to the market over the next 12 months from July this year to June next year.
Transport Minister Khaw Boon Wan said in a Facebook post on Thursday: “The question is how to redistribute the COEs accumulated from April to June fairly and not cause market contortion... We will re-inject the COEs gently so there is a soft landing.”
One-third of the accumulated quota - 6,494 COEs - will be returned over the first three months from July to September this year.
The remaining two-thirds of the accumulated quota - 12,996 COEs - will be returned over the subsequent nine months from October this year to June next year.
This will allow LTA to ensure sufficient supply of COEs to meet orders that have built up during the period of COE bidding suspension, as well as to smoothen the supply of COEs to ensure long-term market stability.
Industry players are divided over how COE prices might look like once bidding resumes.
Mr Raymond Tang, honorary secretary of the Singapore Vehicle Traders Association, told The Straits Times that prices are likely to go up due to the backlog of COEs since bidding was suspended for three months.
“Car dealers would also rather let go of their stock now instead of watching the COE prices given the uncertainty in this pandemic.
“They have been holding on to stock for a few months and there is no guarantee that COE bidding might be suspended again if Covid-19 worsens.”
On the other hand, Mr Neo Nam Heng, chairman of diversified motor group Prime, said that downward pressure of COE prices by at least 10 per cent is expected, with COE prices of commercial vehicles likely to drop more than that of private cars .
“This gradual easing provides a soft approach given the weak consumer and business sentiments. There will be enough COEs in the next three months,” he said.
The next COE quota announcement for the bidding period from August to October will be made in July.
COE bidding exercises were suspended in April when Singapore entered its circuit breaker on April 7. The last bidding exercise was on March 18.
If COE exercises had been conducted during the circuit breaker, it would mean car sales would have carried on.
But because the sale of vehicles was not considered an essential service, it was suspended in light of the tightened Covid-19 pandemic measures during the circuit breaker period.
In the March 18 exercise, the COE price for cars up to 1,600cc and 130bhp finished at $31,210, down from $32,699 at the previous tender two weeks ago.
The COE premium for cars above 1,600cc and 130bhp closed at $30,012, down from $32,801.
The premium for the open COE category, which can be used for any vehicle type except motorcycles but which ends up mostly for bigger cars, finished unchanged at $32,500.
The commercial vehicle COE price ended at a new low of $22,002, down from $24,202, reflecting worsening business sentiment.
The premium for motorcycles, however, bucked the trend to end at $4,489, up from $4,310.