CERTIFICATE of Entitlement (COE) prices remained stable in July’s second round of bidding, with the most significant change being the motorcycle category’s 2.1 per cent increase.
The other four categories, including the two passenger car categories, did not post changes of more than 1 per cent.
Category D, for motorcycles, increased by 2.1 per cent, or S$189, to S$9,089.
Category E, the open category which can be used to register any type of motor vehicle except for motorcycles, saw the smallest change: It dropped by 0.5 per cent or S$548 to S$100,341.
The price for Category A, for mainstream cars, rose 1 per cent or S$898 to S$91,889. Category A COE applies to mainstream cars that have engines of up to 1,600 cubic centimetres (cc) in capacity or with up to 97 kilowatts (kW) of power, or for electric vehicles (EVs) with up to 110 kW of power.
The premium for Category B fell 0.9 per cent or S$901 to S$100,000. Category B is for cars with engines of more than 1,600 cc in capacity or that have more than 97 kW of power, or for EVs with more than 110 kW.
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Prices for Category C, applicable to commercial vehicles and buses, increased 0.9 per cent or S$600 to S$70,601.
The waiting game
Industry observers said that showroom traffic has not returned after the sector had a quiet June due to the school holidays, and that overall, the market has been slow aside from some EV standouts.
Nicholas Wong, the chief executive officer for authorised Honda dealer Kah Motor, said that the market has been steadily quieting since January, when Category A hit a low of S$65,010 in the month’s first round of bidding.
Ng Lee Kwang, board adviser for Goldbell Corporation, said there could be macroeconomic reasons behind buyers holding back on car purchases.
With Singapore’s general election on the horizon, some in the industry are expecting the authorities to release more COE quota to tame high COE prices, which have “always been a political sore point”, he said.
He added that the lead-up to the US presidential elections in November are increasing uncertainty in wider financial markets.
A sales manager at a car dealership told The Business Times: “Everybody is waiting to see if (COE prices) will drop. If you look at the past few months, the COE price changes are up and down all the time, but generally within the S$3,000 price range. It’s as good as stagnant.”
Stable but too high
Both Kah’s Wong and Goldbell’s Ng characterised COE premiums as stable but high, and pointed out that the quotas were simply not enough to bring prices down.
“Stability at this high level (of prices) is not good. A more sensible level, around S$60,000 for Category A, is good and what people are expecting, as we saw in January,” Wong said.
He pointed out that COE prices have remained at their current levels for some time, although the COE quota has been greater than last year and the total new passenger car market is expected to be larger in 2024.
For the first five months of this year, 14,802 passenger cars were registered in Singapore, compared to 10,892 in the same period last year.
Wong and Ng also noted that the gap between Category A and Category B is shrinking. It is now S$8,101, compared to S$22,799 in the same round in 2023.
Ng said that the proliferation of popular EV models in Category A has kept buying activity and prices high, while the hard cap of S$60,000 in Preferential Additional Registration Fee rebates on more expensive cars introduced in February could have put a damper on Category B sales.
As previously reported by BT, Category A EV sales have boomed. China EV brand BYD is the top-selling brand for the first five months of the year, and its Category A Atto 3 is the best-selling car in Singapore in that period, with 1,861 units registered.
Wong said that policy changes have allowed more powerful and more expensive EVs into Category A. As EVs have a higher power limit and receive rebates, this means that the category may no longer be considered mainstream.
“Down the road, if (categories A and B) ‘merge’ and are the same price, the buyers with higher purchasing power will still dominate, which defeats the purpose of having two separate categories,” he said.
