Commercial vehicles’ COE prices lowest in 6 years
TODAY file photo
SINGAPORE — Certificate of Entitlement (COE) prices for commercial vehicles tumbled to their lowest in almost six years at the wrap of the latest bidding exercise on Wednesday (April 26), the last before a bumper supply of COEs for this category of vehicles kicks in next month.
The premium for Category C (goods vehicles and buses) fell to S$26,501, down 42.3 per cent from the previous exercise. This was the lowest since May 2011.
COE premiums stayed mostly unchanged for the other categories, save for motorcycles (Category D), which fell 11.6 per cent to S$6,712.
Earlier this month, the Land Transport Authority (LTA) announced that the quota for Category C would leap almost seven-fold.
The average monthly quota will rise to 2,168 between May and July, up from 322 from February to April.
Traders who spoke to TODAY said buyers may be holding back from placing bids or bidding high because of the prospect of more COEs in the market over the next three months, which could translate to lower prices.
Mr Ron Lim, head of sales and marketing at Nissan distributor Tan Chong Motor, said: “The market knows the COE (prices) will drop with more quotas coming out; it’s only how far it’ll drop.”
Yong Lee Seng Motor managing director Raymond Tang added: “People (are) still bidding, (but) they try not to bid that high, because they know that the COE (prices) will be dropping (from next month).”
Mr Tang said he does not foresee a drastic drop in the Category C COE premiums over the next few months, although it could rise or fall by “a few thousand” dollars.
But Automobile Importer & Exporter Association (Singapore) president Neo Tiam Ting said the question was whether the demand could match up to the bumper crop of COEs. “If demand cannot cover supply, the COE will be S$1,” he quipped.
In anticipation of the tepid demand before the increased COE supply, distributors have cut prices to draw customers in. Tan Chong Motor, for instance, pruned its prices for commercial vehicles by up to S$20,000, Mr Lim said.
The LTA had previously noted that the sharp jump in the Category C quotas was due to a large number of de-registrations in the preceding quarter, which in turn resulted from the high number of COEs renewed in 2007. There was then a shortage in the supply of new Euro IV diesel goods vehicles.
The fall in Category C prices was a welcome respite for businesses.
Mr Reuben Ang, managing director of caterer Elsie’s Kitchen, said the lower premiums would allow it to explore replacing some of its ageing vehicles, rather than extending their COEs.
“Businesses have been holding out (and) extending the COEs (of older vehicles) … because of the high cost of replacement,” he said.
In recent months, his firm has extended the COEs for four or five vehicles in its fleet of 30 or so vans and lorries. But older vehicles tend to run into problems as they break down more often, Mr Ang added.
NUMBERS AT A GLANCE:
Cat A (Cars up to 1,600CC & 97KW): S$51,600 (down from S$52,000)
Cat B (Cars above 1,600CC OR 97KW): S$54,406 (up from S$54,405)
Cat C (Goods vehicles and buses): S$26,501 (down from S$45,906)
Cat D (Motorcycles): S$6,712 (down from S$7,589)
Cat E (Open category): S$54,616 (up from S$54,556)
