THE premiums for all Certificate of Entitlement (COE) categories fell in October’s second round of bidding.
Based on data from the Land Transport Authority (LTA) on Wednesday (Oct 23), the categories for motorcycles and commercial vehicles had the largest decreases.
Passenger car categories saw small declines, with none dropping by more than 1.8 per cent.
The premium for Category D, used to register motorcycles, decreased by 4.1 per cent or S$412 to S$9,589.
The premium for Category C, applicable to commercial vehicles and buses, fell 2.8 per cent or S$2,070 to S$72,939.
Category A, for mainstream cars, inched downwards by 0.9 per cent or S$899 to S$102,900.
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The Category A COE applies to 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 Category B premium – for larger, more powerful cars – dropped 1.8 per cent, or S$2,112, to S$113,890.
This category is 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.
Category E, the Open category which can be used to register any type of motor vehicle except for motorcycles, decreased by 1.1 per cent or S$1,300 to S$114,700.
Category E is typically used to register vehicles that fall under Category B, as they are almost always the most expensive type of COE.
The dips in COE premiums for October’s second round comes after categories A, B and E reached new highs for 2024 in the preceding round, fuelled by a longer period between bidding rounds and a major consumer car show, The Car Expo, in early October.
“Knee-jerk reaction”
Car dealers The Business Times spoke to said that the drop in premiums is a direct result of the highs seen in October’s first round of bidding.
Anthony Teo, managing director of BYD distributor and dealer Vantage Automotive, said this is a typical reaction to high COE prices.
“Last round’s prices were particularly high because of the car show and longer break, so car orders would have slowed down (since) for most dealers. And therefore, COE prices came down,” he said. “It’s a knee-jerk reaction.”
He also pointed out that with higher COE quotas for the bidding rounds in the next three months, there is less price pressure as well. The LTA on Oct 4 announced higher COE quotas for November 2024 to January 2025.
“For the next bidding round, there will be more COEs to go around, so everyone calmed down this round,” said Teo.
Demand variables
Lee Hoe Lone, managing director of Zeekr and Xpeng distributor Premium Automobiles, agreed that car dealers might bid less aggressively with the expected increase in COE quotas starting from next month.
However, he cautioned that dealers also look at the final quarter of the year as their last chance to boost sales figures, in order to meet targets for volume incentives set by manufacturers.
“There could still be a lot of pushing (for sales), especially by the larger players, as dealers want to secure their volume bonus, which can amount to a lot of money,” he said.
BYD is an example. Now one of the best-selling car brands in Singapore, it launched two models this month with impressive sales results.
It debuted a new luxury sub-brand called Denza on Oct 10, and nabbed 300 orders for the D9 luxury multi-purpose vehicle (MPV).
On Tuesday, it launched the BYD M6, a seven-seat mainstream MPV. Vantage’s Teo confirmed that BYD secured around 400 orders for the vehicle.
At The Car Expo, new electric vehicle-centric brands from China were cited as a factor that propped up sales despite the high COE environment.
With the competitive environment and the continued demand from private-hire cars – the numbers of which continue to grow – Lee predicts that COE premiums will remain high.
“I don’t think Category A will drop under S$95,000, or Category B under S$105,000 for the rest of 2024.”
