Mixed reactions over changes to COE

Mixed reactions over changes to COE

    By Dylan Loh
    POSTED: 09 Sep 2013 8:48 PM

The changes to the Certificate of Entitlement system drew mixed reactions, with several car dealers saying it does not solve the problem of tight supply.

SINGAPORE: The changes to the Certificate of Entitlement system drew mixed reactions, with several car dealers saying it does not solve the problem of tight supply.

While premium models will be shifted to the big cars category, dealers said a limited quota of certificates will likely cause prices to remain high.

Prospective car-buyers Channel NewsAsia spoke to said they will continue to observe the market before making any decisions.

One of them, Vijay Sabapathy, intends to monitor car prices for three months after Certificate of Entitlement (COE) changes kick in from February 2014.

The 33-year-old prospective buyer is looking for a mass market ride, but doubts prices will drop even with authorities taking premium models out of the small cars COE category using vehicle-horsepower and engine capacity as factors.

He said: "If you move one category of buyers out, it will just mean that the floodgates will be opened for everyone else who's waiting to buy a car to jump in."

Others are more optimistic. Another prospective car buyer, Tseng Hsien Cho, said: "Hopefully this measure will allow the mass public from the middle sector, from the middle-income group, to have a chance to own a car."

Once the changes are in place, car dealers said mass market Japanese models, which have been on a popularity decline in recent times, may make a comeback. Dealers of performance vehicles meanwhile, expect a "crowding effect" in the COE Category B section for big cars.

Henry Heng, manager of Prime Cars, said: "There is very heavy traffic in the Cat B already. I think (the cost will) depend on how much COE they can give for Cat B."

Future COE quotas then, will likely affect how high prices go for premium models.

Raymond Tang, honorary secretary of the Singapore Vehicle Traders Association, said: "When there is more COE released, definitely the COE price will be more stable."

Associate Professor Lee Der-Horng, a transport researcher with the National University of Singapore, said: "Perhaps we should consider a constant COE supply, which means maybe on an annual basis, we just have the 65,000 or 70,000 -- depending on the actual evaluation and testing."

Observers expect cars which will eventually be shifted under the COE Category B section to enjoy healthy demand before changes take effect. Some even think big car COE prices may rise above the S$100,000 mark, with more vehicles expected to be moved into the category.

Dr Janil Puthucheary, a member of the Transport Government Parliamentary Committee, felt that the latest changes to the COE system are fair, and likely the best that can be currently achieved.

Dr Janil said the COE system maintains the idea that cars are a luxury, rather than a necessity. However, he said the tweaks still make cars available to those who view them as a necessity.

He also explained why some suggestions were dropped, such as a surcharge for those with more than one car.

Dr Janil said: "Implementing a surcharge for multiple car ownership will be very difficult to police. There are many ways around it. But also, it affects a very small segment of the total car population.

"It's not going to have a desired effect of making mass market car more accessible to the people whom Cat A was meant for. That's the fundamental thing we're trying to achieve here."

- CNA/ac

- wong chee tat :)