Certificate of entitlement (COE) premiums ended mostly lower at the latest tender yesterday as the coronavirus crisis dampened, but did not extinguish, demand for cars.
The COE price for cars up to 1,600cc and 130bhp finished 4.6 per cent lower at $31,210. The premium for cars above 1,600cc or 130bhp fell by 8.5 per cent to close at a 10-year low of $30,012.
The price 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.
While the falls were expected, motor traders were predicting a bigger correction. Mr Neo Nam Heng, chairman of diversified motor group Prime, said: "The market was expecting a drop of $3,000 to $5,000, not $1,500 to $3,000."
He said premiums could have been propped by "cheaper models... which are the only ones which are still selling". For some traditional top sellers, fresh enquiries had fallen by 70 to 80 per cent since the virus outbreak.
"So, dealers are disappointed," Mr Neo said.
The industry veteran noted that consumer sentiment is still weak, which explains why premiums are relatively low despite the smaller supply of COEs. "If the COE quota was this small during normal years, the car COE price would have been $50,000," he said.
Meanwhile, the commercial vehicle COE premium fell by 9.1 per cent to close at $22,002 - its lowest in almost nine years. Besides the worsening business sentiment, traders said fleet owners may be holding back for a new scheme which encourages buyers to switch to greener models. The various incentives for this kick in next year.
The motorcycle premium, however, bucked the trend to end 4.2 per cent higher at $4,489.
Singapore Motorcycle Trade Association vice-president Norman Lee said demand has risen with gig workers looking to two-wheelers as a means to earn a living. With the current slowdown affecting private-hire car drivers, Mr Lee said he is getting sales enquiries from non-motorbike owners now.
Industry watchers expect COE prices to remain soft in the coming tenders as Singapore and the world are braced for more uncertainty.
Several car plants have also ceased or pared down production as the virus pandemic sweeps across Europe and North America.
Christopher Tan
