SINGAPORE - There will be fewer certificates of entitlement (COEs) to bid for in the coming three months, with the overall vehicle COE pool shrinking by 4 per cent.
This is the second quota where a 0 per cent growth policy has been applied by the Government.
The Land Transport Authority (LTA) said on Thursday (April 19) that there will be 24,614 COEs available from May to July - down 4 per cent from the previous quarter's 25,632.
Car COEs have taken the biggest hit. The monthly COE supply in Category A - for cars up to 1,600cc and 130bhp - will shrink by 8 per cent to 2,867.
In the previous quarter, from February to April (2018), there were 3,115 such COEs available for bidding every month.
The monthly COE quota in Category B - for cars above 1,600cc or 130bhp - will also slide by 8 per cent, shrinking from 2,779 to 2,559 for the May-July period.
In the open category, there will be 1,113 COEs each month for buyers to vie for, a drop of about 1.7 per cent. Open category COEs are mainly used to purchase bigger cars.
Industry players say the move did not surprise them, as there were fewer car owners scrapping their vehicles in the January to March (2018) period.
When a car is de-registered, its COE is recycled back into the system, and this is one of the main determinants of the COE supply, which is revised quarterly. In February (2018), there were just 2,458 Cat A cars de-registered, the smallest number in over a year.
Mr Nicholas Wong, general manager of Honda agent Kah Motor, expects COE prices in Cat A to increase and the gap to widen against premiums in the big car category, Cat B.
At the close of the latest COE tender on Wednesday (April 18), COE prices in Cat A ended 4 per cent higher at $38,510. The premium for Cat B finished 0.7 per cent lower at $37,330.
Come July, a more stringent emissions scheme will kick in, which will see more car models slapped with surcharges. Mr Wong said: "Dealers will be in a hurry to sell off cars with small or even no margins, to trim their inventory. This could put pressure on COE prices," he added.
Singapore Vehicle Traders Association president Michael Lim said even with the reduced quota, car COE prices will hover between $36,000 and $40,000. "The COE bids in the past few months were not that strong. The market is a bit weak," Mr Lim added.
The motorcycle COE quota, meanwhile,will increase marginally by 2.7 per cent to 1,053.
There will also be more COEs for potential commercial vehicle owners to vie for.
The monthly quota for these vehicles has increased by 23.7 per cent to 610.
Unlike other vehicles, the growth rate for commercial vehicles remains unchanged at 0.25 per cent, until the first quarter of 2021.
The LTA has previously said this was to give businesses more time to improve the efficiency of their logistics operations and reduce the number of commercial vehicles they require.