COEs up in car categories

COEs up in car categories
By Hetty Musfirah | Posted: 20 July 2011 1632 hrs
     
SINGAPORE: COE premiums continued its general uptrend for cars in the latest bidding exercise on Wednesday.

For small cars, although the increase was a marginal $13 this time round, it also breeched the $56,000-mark to hit a 10-year high of $56,002. In 1997, it was around $62,000.

COE price for big cars (above 1600cc) rose S$4,000 to S$72,501. The highest price hit for this category was in 1994, when it was in the $100,000 range.

The biggest jump came from the Open Category, where the certificates are usually used to buy cars. Premiums were up S$5,679 to S$74,490.

In the Goods Vehicles and Bus Category, the COE price jumped S$1,912 to S$34,502.

The only category to see a dip is the COEs for motorcycles - down $348 to $2,012.

Industry players said COE premiums particularly for cars, will continue to see pressure when the new quota kicks in next month.

Dealers said the rise in COE premiums this time was due to aggressive bidding, before the new quota kicks in next month.

The new quota will see fewer COEs allocated for big cars. And dealers said that would translate to higher premiums.

The last time COE prices reached the $72,000-mark was in December last year, while rates hit the $100,000 range back in 1994.

"The last time it hit $72,000, the average COE per tender is about 500 pieces. Come August, this number will be reduced to 350 pieces, which is almost a 30 per cent cut. So hypothetically, there's a lot of reason for COE to break the last high," said Ron Lim, GM of Tan Chong Motor Sales.

More COEs though, will be allocated for small cars, from next month.

But dealers said the higher quota will make little difference to market sentiments, due to tougher competition among industry players.

Dealers that Channel NewsAsia spoke to said that Japanese cars used to dominate the small cars market, but because of the higher COE prices, the prices of small Japanese cars have crossed the $100,000-mark.

Due to this, they said such cars no longer appeal to the average Singaporean. And with more continental brands also joining the market, the COE prices for small cars are likely to go up even higher in the next few months.

Luxury car brands are not as badly affected by the higher COEs.

"As the prices of COE go up, people start to move more to premium brands, where the COE component is a smaller component to the overall price of the car," said Marc Singleton, CEO of Premium Automobiles.

As competition heats up along with high COE prices, some dealers said they are offering better after sales and servicing packages to woo buyers.

- CNA /ls

- wong chee tat :)