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SINGAPORE: Prices of cars have gone up at some showrooms, ahead of a planned cut in the number of Certificates of Entitlement (COEs) next month.
Some dealers said they have increased prices by between S$4,000 and S$5,000 in anticipation of a smaller number of COEs.
Some buyers understand what the move to slash COE quotas from 5,885 to 4,238 will mean, but are unfazed. However, some others are not wasting time in case prices go up further.
One buyer who bought his car last week, feels the price increases may dampen the mood to buy.
He said: "I can sense from the not-so-crowded place that prices might have gone up. Last week, when we came it was just swarming. I think people are just sinking in the new prices."
Car dealers have reacted swiftly to the COE changes. KIA Motors, for example, increased prices for Category A and B cars by S$5,000.
But KIA Motors does not think this will affect those who are serious about buying a car.
Sebastian Sim, sales manager, KIA Motors said: "We just did the increase on Thursday. Sales for Friday, honestly, is still quite healthy. I suppose (because of) those customers who are genuine in buying.
"It is all over the media that prices will go up; COEs are being cut. Genuine buyers are coming in to buy to get current prices. If not, it is going to go up in months to come."
The price increases are partly pegged to the cut in the COE quota. The market for Category A or small cars, which had the biggest cut of about 40 per cent, could stand to lose out to the used-car market.
Mr Sim said: "When COE premiums are going on the upward trend, new cars will be pricier. Customers who are looking for more budget cars will look for used cars instead of new cars."
Although it is still too early to tell how much prices will increase after April, car dealers are bracing for a sharp fall of up to 50 per cent in sales for Category A cars.
- CNA/sc
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