Coronavirus: COE bidding likely to be postponed, say motor traders

Postponement of COE tenders is uncommon.
Postponement of COE tenders is uncommon.ST PHOTO: LIM YAOHUI

SINGAPORE - Will certificate of entitlement (COE) bidding be postponed? Industry watchers think it is likely, given the new stringent measures announced to combat the Covid-19 outbreak.

The Straits Times understands the Land Transport Authority (LTA) is meeting with a number of representatives from the motor industry on Friday evening (April 3) and Saturday morning (April 4), possibly to inform them of the postponement as well as to gauge what impact a postponement will have on vehicle sellers as well as buyers.

Given the unprecedented nature of the developing coronavirus crisis, observers said putting on hold all motor-related transactions would be almost a given.

"I think if all non-essential businesses are to cease, then COE bidding will have to be postponed, since the motor trade is not considered to be essential," one motor trader said.

Several others echoed the sentiment, saying the tender starting next Monday and ending Wednesday is likely to be called off until further notice.

One however, reckoned that the coming exercise will carry on as it may be too disruptive to call off the exercise at such short notice. "They will continue with this one, but postpone the following one," he predicted.

Postponement of COE tenders is uncommon. Since the vehicle quota system started in 1990, there have been only a couple of delays. One was in 2005, when a tender was postponed because of a technical glitch. Another was in 2017, ahead of significant changes to motorcycle taxes.

But any postponement in the wake of the more stringent stay-home measures announced Friday is likely to be longer. The measures to contain the spread of Covid-19, which include no more eating out and the suspension of all non-essential services, are to be in place from next week till May 4 - four weeks or two incubation cycles of the virus.

If COE tenders are postponed during this period, it will be the longest suspension of COE bidding. It will entail disruption to a host of other motor-related transactions, such as vehicle registration, deregistration, and transfers of used cars.

 

The prospect is a Catch-22 situation.

A veteran motor trader said: "If they stop bidding, they will need to extend the expiry of COEs obtained during the previous tenders, as well as cars which are due to be scrapped.

"If they continue with the COE bidding, they will have to allow us to carry on selling cars. It will be interesting to see what they will do."

Mr Neo Nam Heng, chairman of diversified Prime group, said the economic slowdown triggered by the virus outbreak is already causing havoc to the motor trade.

 
 
 

"Bank loans are getting harder and longer to be approved. Businesses are holding back purchases of commercial vehicles because of uncertainty," Mr Neo said. "We have actually written in to ask for the six-month validity of COEs to be extended to 12 months."

The Straits Times has reached out to the LTA for comment. Earlier this week, the authority announced a suspension of electronic road-pricing (ERP) charges in the city and on several expressways and arterial roads, with rates at most other locations to be slashed from next Monday (April 6) - a first in the ERP's 22-year history.