COE prices ease in most categories except commercial vehicles; Cat B premium down 2.4%

SINGAPORE - Certificate of entitlement (COE) prices eased across most categories – including for cars – at the latest exercise on May 21.

The price of a Category A COE – meant for smaller and less-powerful cars and electric vehicles (EVs) – was down 0.5 per cent to $102,501, from $103,009 recorded at the

previous tender on May 7

.

This comes after the price of a Category A COE rose over the past four tender exercises.

In Category B, meant for larger and more powerful cars and EVs, the premium was $116,988, a drop of 2.4 per cent from $119,890 at the last exercise.

The price of an Open category (Category E) COE was $118,010 – 0.7 per cent lower than the $118,889 in the previous exercise.

Although Open category COEs can be used to register any vehicle type other than motorcycles, they are almost always used for bigger and more powerful cars.

At $8,707, the motorcycle (Category D) COE premium was $2 lower than the previous price of $8,709.

The commercial vehicle (Category C) COE premium bucked the trend, rising 1 per cent to $63,189, from $62,590.

A COE is needed to register and use a vehicle in Singapore.

The number of bids received fell in all categories except the Open category, which saw a number of bids that was comparable to the previous round.

For Category A, the number of bids entered was 14.5 per cent lower than on May 7, while Category B saw a decline of 9.7 per cent.

This translated to fewer unsuccessful bids in Category A and Category B.

There were 648 unsuccessful bids for Category A, down from 996 previously, while for Category B, the number of unsuccessful bids fell from 410 on May 7 to 311 in this round.

The lower demand seen in the two car categories suggests that the market has been quieter in the two weeks since the last tender exercise.

Mr Ng Choon Wee, commercial director at Komoco Motors, which distributes Hyundai, said that dealership showrooms have been quiet over the past two weeks.

He believes that the greater part of demand for Category A COEs at the latest tender exercise came from dealers trying to register cars they had earlier sold, and not deals that were closed more recently.

Mr Ernest Tan, director of new ventures at Vincar, which distributes the Aion and Proton e.Mas EV brands, said demand for cars was not as strong as it was before COE premiums for Category A and Category B rose at the May 7 exercise.

Mr Raymond Ng, managing director for Eurokars EV, the authorised distributor of Chinese car brand MG, called the Category A premium drop of $508 “insignificant”.

However, he said that more recently, there have been signs of a rebound in footfall for dealerships with fresh models and attractive pricing, suggesting that there is still buying interest in the market.

Motor dealers noted that some dealers may be stocking up Open category COEs at the latest tender exercise, seeing how the latest premium for the category was higher than Category B’s by $1,022.

Open category COEs, which are transferrable, enable dealers to register cars immediately.

Industry watchers said this can help them to hit their sales target for the month, instead of waiting for the next tender exercise to secure the COE needed to register a car.

Given how there were fewer unsuccessful bids at the latest exercise than before, dealers expect COE prices to come down slightly in the next few rounds.