CERTIFICATE of Entitlement (COE) premiums for all vehicle categories rose in the first round of bidding for August, with the category for larger, more expensive vehicles leading the way.
Category B, applicable to cars with engines of more than 1,600 cubic centimetres (cc) in capacity or that have more than 97 kilowatts (kW), or for electric vehicles (EVs) with more than 110 kW, rose 6.1 per cent or S$6,101 to S$106,101.
This is the category’s largest increase since January’s second round, when it rocketed 31.7 per cent. The next largest increase was 55 per cent in April’s first round of bidding.
It was mirrored by Category E, the open category, which can be used to register any type of motor vehicle except for motorcycles, which rose 4.9 per cent or S$4,898 to S$105,239.
Category E is typically used to register vehicles that would fall under Category B, which is almost always the most expensive COE premium.
The price for Category A, for mainstream cars, rose 2.6 per cent or S$2,390 to S$94,289.
Category A COE applies to mainstream cars that have engines of up to 1,600 cc in capacity or with up to 97 kW of power, or for EVs with up to 110 kW of power.
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Prices for Category C, applicable to commercial vehicles and buses, ticked upward by 0.7 per cent or S$499 to S$71,100.
Prices for Category D, used for motorcycles, fell 5.6 per cent, or S$512, to S$9,601.
New blood
Dealers The Business Times queried said the significant rise in Category B was the result of the entrance of new brands to the market and a three-week break between bidding rounds.
In July, two new marques debuted in Singapore: mainstream brand Xpeng and Singapore’s first Chinese luxury brand, Zeekr, both distributed by Premium Automobiles. Both brands sell EVs that use a Category B COE.
Xpeng kicked off sales with a pop-up showroom at UOB Plaza on Jul 24, while Zeekr began sales from its showroom in mid-July.
Dominic Tan, sales manager of Xpeng Singapore, said that the brand’s sales results so far have been “very positive” with a large number of buyers already familiar with the brand.
Paul McMenamin, sales manager of Zeekr Singapore, said that the brand’s sales have been encouraging, especially as a newcomer to the luxury market traditionally dominated by German brands.
Both Xpeng and Zeekr declined to comment on specific sales figures.
Jason Lim, the managing director of Eurokars Auto, a dealer for BMW, said that at this stage the new brands would be motivated to secure COEs and to put more cars on the road, as the novelty or curiosity factor would help drive interest.
Ng Choon Wee, the commercial director for Hyundai distributor Komoco Motors said; “The entrance of new brands in the fast-moving EV space is naturally exciting, so there is some hype for sure. We can see that in the over-subscription of Category B this round.”
He pointed out that the debut of brands like Zeekr are a sign of changing perceptions around East Asian brands, which have traditionally offered only mainstream products.
“For Hyundai, we have seen the buyer profile evolving to include more affluent buyers who are considering our Category B cars,” he said.
These models include the Ioniq 5 and Ioniq 6, both Singapore-made EVs, and the Santa Fe sport utility vehicle, which has been repositioned as a premium model.
Both Ng and Lim pointed out that the number of bids received – an indicator of market interest – for Category B increased by 29.1 per cent or 259 to 1,150.
The longer duration between July’s second round and August’s first round of bidding also increased demand for COEs.
“For BMW, as a major luxury brand, it has been business as usual. We have seen increased activity over the last few weekends, with promotions and efforts to drive showroom traffic. So with the three-week break, an increase in premiums was expected,” said Lim.
Komoco’s Ng said that the bump in COEs was expected with the longer interval, and in line with increased showroom footfall over the past weeks.
COE bidding begins on the first and third Mondays of each month. This means that between some months – such as this July and August – COE bidding only begins in the second week of the new month and there is a three-week interval between rounds.
This means car dealers have more time to collect orders and more COEs to secure when bidding resumes, so demand increases.
