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COE prices rise across the board except for commercial vehicles

2024-03-20 00:00:00.0 海峡时报-新加坡原网页

SINGAPORE - The prices of cars and motorcycles look set to rise, following higher certificate of entitlement (COE) premiums for such vehicles recorded in the latest tender exercise on March 20.

The COE premium for commercial vehicles was the only one that recorded a dip.

At $85,489, the price of COEs for smaller, less powerful cars is 3 per cent higher than the $83,000 recorded in the previous exercise two weeks ago.

For larger, more powerful cars, the COE premium is also up, by $1, to end at $96,011.

The price of Open category COEs also edged up, by 0.9 per cent, to end at $95,856, from $95,010. Open category certificates can be used to register any vehicle type other than motorcycles but end up almost exclusively for larger, more powerful cars.

The COE premium for motorcycles was $9,689, up 3.1 per cent from $9,400.

The COE price for commercial vehicles tumbled 7.3 per cent to $70,112, from $75,599 in the previous tender exercise.

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With the latest results, $10,522 separates the premiums for the two car COE categories. This is the closest they have been since April 2021, when the COE for larger cars cost $6,709 more than that for smaller cars. Between 2022 and 2023, the difference between the two tended to be closer to $30,000.

Some motor dealers attributed the higher premium in the COE category for smaller cars to aggressive promotions for vehicles from German carmaker BMW, which is represented by two dealerships, Performance Motors and Eurokars Auto. Popular models such as the BMW X1 sport utility vehicle and the 216i Gran Coupe are in the smaller car COE category.

There is an ongoing sale at Performance Motors, which has opened a pop-up showroom at its workshop in Kampong Arang Road near Katong, while its flagship facility in Alexandra Road near Queenstown is undergoing renovation. On its website, the dealer is advertising “savings of up to $70,000”, without stating which models these are for.

Other dealers said electric vehicle brand BYD has been busy securing COEs to deliver cars. The Chinese carmaker recently launched an updated version of its Atto 3 small sport utility vehicle, which industry players said has been selling well.

ST also observed that more than 110 bids were entered for small car COEs in the last nine minutes of the latest tender exercise.

Mr Nicholas Wong, chief executive of Honda agent Kah Motor, believes that some of these late bids were from companies that lease vehicles to private-hire car drivers.

He said fleet companies would tend to wait until near the end of the exercise to put in a large number of bids, if they see an opportunity for the COE premium to end up within their targeted price level.

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Another motor industry insider, who declined to be named because he was not authorised to speak to the media, said there have been recent inquiries from fleet companies to replace their older cars.

The latest premium for smaller car COEs is about $8,000 lower than the $93,503 recorded in March 2023. This means it is cheaper for fleet companies to register new rental cars now.

With the COE premium for smaller cars rising to a greater extent than that for larger cars, Mr Ng Choon Wee, commercial director of Hyundai distributor, Komoco Motors, said premium car brands may even use Open category COEs secured at the latest exercise to register smaller cars in the next few months, if the gap between the two car COE categories continues to narrow. Open category COEs can be held for three months.

Mr Neo Nam Heng, chairman of diversified motor group Prime and adviser to the Automobile Importer and Exporter Association, which represents parallel importers, said dealers would have to raise prices of smaller cars to cover the higher cost, following the rise in COE premiums in that category.