COE premiums up for cars and motorbikes, but price of Open COE slips

Premiums for the Open and commercial vehicle COEs dipped slightly in the tender on Jan 18, 2022. ST FILE PHOTO

SINGAPORE - The prices of certificates of entitlement (COEs) rebounded in the latest tender on Wednesday, in line with market expectations of more sales as the Singapore Motorshow last weekend whipped up demand for cars.

Organisers said the show drew about 34,000 visitors from Jan 12 to Jan 15.

The COE premium for cars up to 1,600cc and 130bhp, as well as electric vehicles (EVs) with up to 110 kilowatts of power, finished 7.5 per cent higher at $86,000.

For larger cars and more powerful EVs, the premium ended 3.4 per cent higher at $105,459.

However, the price for Open COE, which can be used for any vehicle type except motorcycles but ends up almost exclusively for bigger cars, dipped by 0.8 per cent to settle at $107,000.

Industry watchers reckon this is a sign of lower confidence for upcoming tenders, with underlying demand set to dip further. The next three-month quota starting in February, which the Land Transport Authority is due to release soon, is also expected to be slightly larger.

The premium for commercial vehicle COE – used for vans, trucks and lorries – also eased slightly, ending 0.2 per cent lower at $77,109.

The motorcycle premium finished 1.9 per cent higher at $11,101.

Mr Nicholas Wong, general manager of Honda agent Kah Motor, said this round’s increases are “not so bad given that we had the motor show”, adding that the previous tender on Jan 5 saw prices fall by as much as $8,000, “which was a lot”.

He said the supply of COEs for the February-April quota period is expected to be bigger, with the mainstay category for cars up to 1,600cc growing by around 10 per cent.

Holding a slightly different view, Nissan agent Tan Chong Motor’s head of sales and marketing, Mr Ron Lim, said the price increase in the latest round had reasons other than the Singapore Motorshow.

“The number of bids for Category A (cars up to 1,600cc) was actually fewer,” he said. “And for Category B (cars above 1,600cc), the number was only slightly higher.”

The LTA said there were 627 bids for Category A and 514 for Category B – from 649 and 487 previously.

Mr Lim said the traditional rush to register new cars in time for the Chinese New Year this weekend was probably a stronger reason for the rise in car premiums.

He added that the dip in Open premium was likely because of expectations of more certificates coming on stream from February. “The market is watching out for the new quota,” he noted.

Market watchers said there was no sign of Tesla or private-hire operators submitting aggressive bids this time. The US electric carmaker had recently cut prices, ostensibly in the face of cooling demand.

The next tender is three weeks away – longer than the usual two-week gap – which usually means more vehicle sales. But because of the Chinese New Year break, with more people going away, the net effect of the longer gap would be negligible, traders said.

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