COE price falls for small cars, soars for big ones

Certificate of entitlement (COE) prices ended mixed in a tender marked by new car launches and an unexpectedly bigger supply in the main car category.

When bidding ended at 4pm yesterday, the COE premium for cars up to 1,600cc and 130bhp closed 6.7 per cent lower at $26,667, a four-month low.

This category had about 200 unused COEs carried over from last month.

The COE price for cars above 1,600cc or 130bhp shot up by 15.9 per cent to hit $39,406 as several recent launches of premium vehicles - including the Mercedes-Benz CLA, BMW 7 and Porsche 911 - whipped up demand.

The premium for Open COE, which can be used for any vehicle type except motorcycles but ends up mostly for bigger cars, closed 8.1 per cent higher at $39,889.

The commercial vehicle COE price fell for the sixth consecutive tender to close at $24,599, down 2 per cent from two weeks ago.

The motorcycle premium rose by 15.4 per cent to $3,554, a four-month high.

Industry observers reckon COE prices for smaller cars will continue to hover at prevailing levels or even dip in the face of weak consumer sentiment. But increasingly heated competition between premium makes - notably Mercedes-Benz, BMW and Audi - will support premiums for bigger cars.

Since last month, BMW has rolled out two leasing schemes to entice customers who do not wish to part with a big down payment or be saddled with a loan.

Mr Neo Nam Heng, chairman of diversified motor group Prime, said: "In the past two weeks, orders were very strong for Category B (bigger) cars. Still, it was a surprise for it to rise so sharply. The other surprise is Category A (smaller cars). It fell even though the market is expecting a big cut in the next quota."

The quota for the August-October period will be announced soon.

Christopher Tan

A version of this article appeared in the print edition of The Straits Times on July 18, 2019, with the headline 'COE price falls for small cars, soars for big ones'. Subscribe