COE prices down for all categories except commercial vehicles

SINGAPORE – Certificate of entitlement (COE) prices fell across all categories except commercial vehicles at the latest tender on Feb 7.

At $72,001, the commercial vehicle COE premium was 5.9 per cent higher than the $68,001 registered three weeks ago.

Premiums for the other COE categories dropped between 0.2 per cent and 8.6 per cent.

The premium for Category B COEs, for bigger, more powerful cars, posted the biggest drop of 8.6 per cent to $102,338, from $112,000 at the previous tender.

The premium for Category A, for smaller, less powerful models, finished at $79,000, or 3.2 per cent below the $81,589 recorded in January.

The price for the Open category COE, which can be used for any vehicle type except motorcycles but ends up being used mostly for bigger, more powerful cars, closed at $100,101, or 8.2 per cent lower than the $109,004 at the previous round.

The motorcycle COE premium dipped 0.2 per cent to $9,290, from $9,309 previously.

The Feb 7 tender comes three weeks after the last exercise on Jan 17, one more week than the usual gap of two weeks. 

It is the first under the new three-month quota period from February to April, when there are 2.2 per cent more certificates than the three months prior.

The longer gap between tenders usually allows dealers to pick up more sales orders. But motor dealers said showrooms have been quiet since COE prices rose at the previous tender in January.

The Category A COE price fell at the latest tender despite the 1,931 bids entered, which was 51 more than the previous round and the most bids received for Category A COEs since August 2020.

Representatives from various mass-market and premium brands said many of the bids entered were for deals closed in early January, when the car prices would have been pegged to the Category A COE premium of $65,000 following the first tender of 2024.

The dealers believed that it was a similar case for Category B COEs, where the prices of the larger cars sold were pegged to the $85,010 COE price set in early January.

They said such deals would not have enough margins to push COE premiums beyond the latest results.

At the same time, they said many of the offers in January were deals that allow between six and eight bids – or three to four months – for the cars to be delivered to buyers. This means that some dealers have up to March or even April to secure the needed COEs to deliver cars.

Ms Corinne Chua, Wearnes Automotive’s managing director for Volvo Cars, said some brands are still waiting for their stock of cars to arrive in Singapore. As such, they would not be in a big hurry to secure COEs at the latest round.

Eight motor dealers polled expect the bulk of the demand for COEs from the January orders to be cleared either by the next tender in February or by March.

Mr Anthony Teo, managing director of Vantage Automotive, which represents BYD and Peugeot, said some dealers may also be hoping COE prices will fall further at the next tender in February, as sales typically slow down during the Chinese New Year holiday.

While dealers said the announced 2.2 per cent increase in COE supply for this period was not significantly more than the previous period, they noted that LTA had in January said the COE supply for cars and commercial vehicles “will continue to increase in 2024 before reaching the peak supply period from 2026”.

Mr Nicholas Wong, chief executive of Honda’s agent, Kah Motor, believes that this message is having an impact on bidding behaviour.

“People are expecting COE prices to slowly come down as the quota is increased with every quarter, so dealers are not as aggressive to bid for COEs now,” he said.