SINGAPORE – Certificate of entitlement (COE) premiums ended mixed at the tender that closed on May 8, with premiums dipping for the smaller car and motorcycle categories.
This is the first tender under the new three-month quota period.
The price of COEs for larger, more powerful cars and electric vehicles (Category B) rose by 2.9 per cent to $105,002, from $102,001 at the previous tender.
The Open category COE premium finished at $104,689, up 1.4 per cent from $103,249.
Although such COEs can be used to register any type of vehicle other than motorcycles, they are almost always used for bigger and more powerful cars.
The price of Category A COEs, meant for smaller, less powerful cars, ended at $93,604 – a dip of 0.4 per cent from $94,010 posted two weeks ago.
Commercial vehicle COE premiums ended at $70,001, up 2.2 per cent from the previous $68,502.
The motorcycle COE price fell to $9,503 from $9,990, a 4.9 per cent drop.
The Land Transport Authority (LTA) announces the number of COEs available for bidding on a three-month basis. The COE supply for the May to July period is 2.7 per cent more than in the previous three-month period.
The main determinant of the COE supply is the average number of vehicles that are deregistered over a rolling four-quarter period. Since May 2023, the LTA reallocates COEs that are only due to expire in the future to reduce the quarter-to-quarter volatility of the COE supply.
For Category A COEs, this translates to nearly 28 more pieces at each tender exercise – an increase which industry players said is not significant enough to upset the status quo.
Mr Jason Lim, managing director of BMW Eurokars Auto, saw the latest results as a sign that COE premiums are stabilising, while Ms Sabrina Sng, a managing director at Wearnes Automotive, said that the latest COE price movements were “relatively mild” compared with what was seen earlier.
Ms Sng, who oversees insurance, EV brand Polestar and sports carmaker Lotus at the multi-franchise group, believes that there are still consumers who are waiting for COE prices to stabilise before making purchases.
Mr Nicholas Wong, chief executive of Honda agent Kah Motor, said that the Category A COE price is still too high. He attributed the high premium to the rising popularity of Category A COE EVs.
In the first three months of 2024, BYD registered 1,002 units of its Atto 3 EV. For the whole of 2023, there were 1,416 Atto 3 registrations.
Although BYD has a Category B COE version of that model, industry sources said that the majority of the registrations are for the lower power variant, which is a Category A COE car.
Compared with the first exercise in January, the latest Category A COE premium is $28,594, or 45 per cent, higher.
Mr Keith Oh, president of the Automobile Importer and Exporter Association, said that Category A COE premiums have been rising too fast. So even though a healthy number of bids was received at the latest exercise, he believes that these bids may be from non-guaranteed car deals.
Cars sold on such contracts give dealers a few months to secure the needed COEs. Those who fail to get their COEs in one round can return at subsequent tender exercises to try their luck.
A senior manager from a mass-market brand, who was not authorised to speak to the media, said that some of the sales orders taken at The Car Expo event in April went in for COE bidding only in the latest round, instead of earlier.
This was because the $5,010 hike in the Category A COE premium at the second tender in April over the one before was beyond what the company was able to bear.
Mr Wong from Kah Motor said: “Many people are waiting for the COE to drop back to the levels seen in January, but given the way COE is allocated now, we won’t be seeing that happen in the mid-term.”
