SINGAPORE - The certificate of entitlement (COE) price for commercial vehicles hit an all-time high in the tender exercise that closed on Wednesday. The COE premium for motorcycles also went up while the other categories ended closer to where they were in the last tender.
Wednesday’s tender exercise is the first under the increased quota announced on Jan 20, 2023.
The premium for commercial vehicle COE – applicable for vans, trucks and lorries – was $85,119 and is 10.4 per cent higher than the $77,109 three weeks ago. This surpassed the record of $81,802 set in November 2022.
The motorcycle premium was $11,602, 4.5 per cent more than last round’s $11,101.
The premium for cars up to 1,600cc and 130bhp, as well as electric vehicles (EVs) with up to 110 kilowatts of power, finished at $86,000, unchanged from the last tender exercise.
For larger cars and more powerful EVs, the premium ended at $105,524, only slightly higher than the previous $105,459.
The price for Open COE was $105,002, down by 1.9 per cent from $107,000.
Such COEs can be used to register any vehicle type except motorcycles, but ends up almost exclusively for bigger cars.
Overall, the current supply of COEs is 3.4 per cent more than in the previous three months. But the commercial vehicle category has taken a cut of some 37.2 per cent, which fuelled the surge in the premium for this type of COE. The supply will remain at this level for the next five tender exercises until April 19.
While some dealers said that Wednesday’s results were largely within expectations, Mr Ng Choon Wee, group commercial director at Komoco Motors, expected the COE premium for the two car categories to be lower, given that there has not been a real rush of customers in showrooms since the last tender closed on Jan 18.
Mr Jason Lim, managing director of Eurokars, which is one of the two BMW dealers in Singapore, said that some dealers may still have Open COEs in hand and fresh orders for cars probably “did not come in quickly enough” for them to need to secure more COEs and push up the premiums.
Ms Corinne Chua, managing director of Volvo Cars at Wearnes Automotive, noted that car dealers were accumulating Open COEs in preparation for the Singapore Motorshow, which ran from Jan 12 to 15.
She expects the COE premium for the larger cars and EVs to remain “either around this current level or even drop slightly” as demand for cars is still weak.
Industry watchers see the fall in the price of Open COEs as a reflection of dealers’ confidence in how premiums will develop in the coming tender exercises.
Such COEs can be transferred or kept for up to three months before they have to be returned to the pool for bidding if they are not used. The lower price posted suggests the industry may be cautious that premiums across the board may slide in the coming tenders.
Bidding for COEs in the smaller-car category was relatively muted. The price stayed below $80,000 until the last seven minutes to the 4pm deadline. This again reinforces industry watchers’ view that market demand is poor.
Used car dealerships report seeing more sales since the Chinese New Year break.
Mr Jason Tan of Lake View Credit, for example, estimated business to be between “10 per cent and 20 per cent” more than in the last two months of 2022.
He said: “Most customers I spoke to did go and look at new cars, but ended up buying used ones.”