Certificates of entitlement (COE) ended lower across the board at the latest tender yesterday as fleet owners continued to hold off new purchases on the back of an oversupply.
COE for cars up to 1,600cc and 130bhp closed 2.1 per cent lower at $38,000. COE for cars above 1,600cc or 130bhp fell by 5.1 per cent to finish at $37,010 - its lowest in nearly eight years. Open COE, which can be used for any vehicle type except motorcycles, ended 2.6 per cent lower at $38,000 - its lowest in more than eight years. Commercial vehicle COE slid 2.8 per cent lower to close at a 24-month low of $35,001.
The premium for the speculative motorcycle category ended 5.1 per cent lower at $7,602.
Motor traders said an oversupply of vehicles such as taxis and private-hire cars has caused a drought of fresh bookings from fleet operators.
Mr Ron Lim, general manager of Nissan agent Tan Chong Motors, said: "The private-hire firms have hardly been present since the beginning of the year. With all the talk about consolidation, I don't think they would be expanding right now."
Mr Lim, who said the prevailing consumer sentiment has been weak this year, added that the new Vehicular Emissions Scheme (VES) continued to depress premiums.
This is because many new cars now do not qualify for rebates, with some in fact attracting surcharges. Sellers have had to trim profit margins for such cars to remain competitive. And so, they have less bidding power for COE.
Others point to a slowdown in parallel import sales. Many of these importers are apparently finding it more difficult to comply with rules pertaining to the VES.
Unlike authorised dealers who obtain certification from vehicle manufacturers, parallel importers have to obtain theirs from third-party test centres - a more tedious and costlier avenue.