PREMIUMS for Certificates of Entitlement (COE) fell for all categories in June’s first round of bidding.
Passenger car premiums – Category A and B – led the way with drops of around 5 per cent each.
Category A saw its single largest price dip in 2024 to date while Category B broke its recent rally, although both categories still remain far from their 2024 lows.
The price for Category A, for mainstream cars, fell 4.9 per cent or S$4,500 to S$88,200. It is the fourth consecutive price drop for the category.
S$4,500 is the largest drop for the category in 2024 so far, exceeding the previous largest drop of S$2,589 to S$79,000 in February’s first round of bidding from January’s second round of bidding.
A 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.
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Prices for Category B fell 4.8 per cent or S$5,082 to S$100,607.
Category B is the category for cars with engines of more than 1,600 cc in capacity or that have more than 97 kW, or for EVs with more than 110 kW.
The fall in premiums breaks the category’s recent rally, which has seen it rise five consecutive times from S$96,010 in March’s first round of bidding to S$105,689 in May’s second round of bidding.
Prices for Category C, applicable to commercial vehicles and buses, decreased 2 per cent or S$1,412 to S$70,589.
Prices for Category D, used for motorcycles, decreased 3.5 per cent, or S$1,412, to S$8,989.
Category E, the open category which can be used to register any type of motor vehicle except for motorcycles, decreased by 3.2 per cent or S$3,402 to S$101,600.
Holiday mood
Car dealers The Business Times spoke to said that the drop in passenger car premiums could be attributed to the start of the mid-year school holidays, which began on May 25.
Nicholas Wong, the chief executive officer for authorised Honda dealer Kah Motor, noted that the price drops for Categories A and B were a result of lower showroom footfall and fewer sales.
He added that the June holiday period usually means slower sales for the car trade.
Jason Lim, the managing director of Eurokars Auto, a BMW dealer, said: “Given that we’re in the midst of the holiday season, it is unsurprising that showroom traffic is relatively more quiet along the automotive belt.”
Ng Choon Wee, the commercial director for Hyundai distributor Komoco Motors, said that despite the slowdown in retail buyers, Category A prices could potentially have dropped even further.
He noticed more aggressive bidding activity in Category A during the last five minutes of bidding. Without these bids, which he attributed to larger players such as major European brands and private-hire car fleets, Category A’s price would have closed at a lower level.
Kah Motor’s Wong also warned of a kickback, which sometimes happens in the round following a major dip in COE premiums.
“Now we are back to the price levels we saw in March, but there could be a rebound if there is a rush to buy in the next couple of weeks,” he added.
Cruising ahead?
But overall, dealers see stability ahead for the passenger car market in the coming weeks.
“This round’s drop is a combination of a few factors: the quieter market, people travelling, plus the small increase in COE quota,” said Eurokars’ Lim.
With Singapore’s two major car shows – The Singapore Motorshow in January and The Car Expo in April – now in the rearview mirror, industry observers told BT in May that they expect the market to stabilise, as dealers would have largely cleared the orders taken during those events by now.
In April, the Land Transport Authority announced the COE quota for the period of May to July with a small increase of 2.7 per cent overall.
“The results are pointing towards a more positive direction since at this juncture, we’re only a few hundred dollars shy of a five-figure premium for Cat B,” added Lim.
Komoco’s Ng added that stability is welcome, but premiums still remain high and the return of mainstream car buyers is still some way off.
“Stability is what the government is after, be it in COE supply or demand. They have stabilised supply with cut-and-fill, but on the demand side, prices are still quite high. I think most potential buyers will still wait for a lower premium.”
