COE and Car Prices

[Musicwhiz]

The Straits Times
Dec 8, 2011
Most COE prices dip as buyers stay on sidelines

A DEARTH of fresh orders at showrooms has dampened bidding in the latest certificate of entitlement (COE) auction, with premiums in all but one category ending lower.

The COE price for cars up to 1,600cc and taxis slid to $52,392, down 4.5 per cent from the previous tender two weeks ago.

The price level is still among the highest ever but that did not deter taxi operator SMRT from entering the fray.

It put in 50 bids but failed to get a single COE.

The other cab companies did not bid as the high premiums would translate to costlier cabs. That would mean thinner profit margins if rental rates to cabbies remain unchanged.

The COE price for cars above 1,600cc took the biggest tumble yesterday, ending 6.5 per cent lower at $72,350.

The premium for the Open category COE, which can be used to register any type of vehicle but ends up mainly for bigger cars, dipped by 2 per cent to $74,340.

The commercial vehicle COE price remained flat at $40,009, just 0.4 per cent lower than previously.

The motorcycle premium bucked the trend by ending slightly higher at $1,902.

Motor traders said the market was quiet in recent weeks because of the rain and people being away for the school holidays.

Consumers were also put off by the lofty prices of COEs, which consumers in Singapore must secure to own a vehicle. The high premiums have pushed up car prices to more than double what they were three years ago.

Some car prices have risen by a bigger quantum than the COE increase, reflecting stronger foreign currencies (namely the Japanese yen) and distributors wanting to make better margins to offset a shrunken market.

A budget model such as the Thai-made Toyota Vios is now more than $100,000. The same car was around $52,000 in December 2008 when the COE premium was between $6,000 and $10,000.

Buyers of higher-end cars - which have gained a bigger share of the market this year - stayed on the sidelines too as worries loom of a weaker economy next year.

'Many of the luxury car companies did not raise prices in the last few rounds,' noted one dealer.

'I think people in business can sense a slowdown coming and are more careful.'

CHRISTOPHER TAN

[Musicwhiz]

The Straits Times
Jan 19, 2012
Mini rebound in most COE categories

CERTIFICATE of entitlement (COE) prices rebounded in the latest tender yesterday, after sliding in the preceding five rounds.

The premium for cars up to 1,600cc and taxis ended at $48,112, up 2.6 per cent from $46,889 two weeks ago.

COE prices for cars above 1,600cc closed at $67,889, up 3.2 per cent from $65,801.

Open COEs, which can be used to register any type of vehicle but end up used mainly for bigger cars, rose from $65,700 to finish at $67,101, up 2.1 per cent.

The premium for commercial vehicles posted the strongest increase of 13.7 per cent, ending at $44,001 from $38,699, fuelled by news of a significant shrinkage in the supply of COEs from next month.

Only the motorcycle premium fell, dipping 7.7 per cent from $1,682 to $1,552.

The latest results were generally in line with market expectations: The spike in the commercial vehicle premium, for instance, was triggered by news of a 34 per cent drop in supply for the next six-monthly quota from next month.

The jump in the premium for cars up to 1,600cc and taxis was, however, a little surprising, given that the number of certificates up for auction yesterday was 19 per cent higher than a fortnight ago, largely from unused certificates from spoilt bids in previous tenders.

Motor traders reckon the increase in this category was fuelled by aggressive sales promotions by dealers and strong bids put in by taxi operators.

About 200 bids came from cab companies - all of them successful. Led by SMRT Corp, they bid as high as $51,000.

Some motor traders, however, believe that the current high prices will not be sustainable in light of an expected economic slowdown.

Mr Ron Lim, the general manager of Nissan agent Tan Chong Motor, said: 'On the whole, the sentiment is still cautious. I don't think people will chase prices up.'

But he said the commercial vehicle premium will be high, given the sharp supply shrinkage.

'The question is whether this COE will overtake Cat A COEs,' he said, referring to the category for smaller cars up to 1,600cc.

CHRISTOPHER TAN

[Musicwhiz]

The Straits Times
Feb 9, 2012
Strong buying, short supply drive COE prices up

AN UNEXPLAINED spike in buying just after the Chinese New Year break has driven certificate of entitlement (COE) premiums higher all round, at the latest tender yesterday.

At the same time, a sharp shrinkage in the supply of commercial vehicle certificates drove the premium up to an all-time high.

COE prices for cars up to 1,600cc and taxis ended 9.8 per cent higher at $52,809, despite a 13 per cent increase in the quota in this category.

The COE prices for cars above 1,600cc closed 8.8 per cent higher at $73,890, while the Open COE, which can be used to register any type of vehicle but ends up mainly for bigger cars, rose by 10 per cent to $73,801.

The premium for commercial vehicles was 13.2 per cent higher at $49,801. At this record high level, the COE price for trucks and vans is almost on a par with that for passenger cars.

Motorcycle COE premiums ended 16.1 per cent higher at $1,802.

Motor traders were not entirely surprised by the strong results, as many showrooms were packed during the Chinese New Year break.

But they were at a loss when asked why the crowds had returned in such numbers.

'It's a big question mark for the entire market,' said Mr Ron Lim, general manager of Nissan agent Tan Chong Motor.

'Many companies were reporting a 30 to 40 per cent increase in sales.

'The rush was unbelievable. It goes to show that Singaporeans still love cars.'

But observers noted that it would not take much to drive premiums up because of a constricted supply.

Overall, the quota for the current six-month period from this month to July is still the smallest ever. The biggest cut, of some 34 per cent, was in the commercial vehicle category.

'The supply is small all round in absolute numbers,' Mr Lim noted.

Meanwhile, businesses will be hit by the record commercial vehicle COE premium.

Mr Michael Wong, general manager of truck agent Triangle Auto, said those who need light commercial vehicles will be hit hardest as the COE premium is now a disproportionately large part of the vehicle price.

He said it looks almost certain that the premium will cross $50,000 this year.

Industry watchers said the high premiums might prompt some businesses to extend the lifespan of their goods vehicles. If they extend by five years, the initial capital outlay will be much lower than when buying brand-new vehicles.

They said if this trend takes off, it will have negative implications for the environment, as Singapore's truck population is already relatively old.

According to Land Transport Authority data, about one-third of the 145,000 commercial vehicles are 10 years old or above.

CHRISTOPHER TAN

[Musicwhiz]

The Straits Times
Feb 23, 2012
COE prices power to new heights

CERTIFICATE of entitlement (COE) prices rose again in the latest tender yesterday, sending car premiums to levels not seen since the late 1990s.

The commercial vehicle COE price went up 4.4 per cent to an all-time high of $52,004.

The COE for cars up to 1,600cc and taxis rose by 8 per cent to $57,009. At this level, taxi companies did not bid.

The COE for cars above 1,600cc climbed 5.8 per cent to $78,189 while the Open COE - used mainly for cars - closed at $78,000, up 5.7 per cent.

This was the latest of four consecutive rounds of increases.

Prospective motorcycle buyers were not spared, with the motorcycle premium ending 11.7 per cent higher at $2,012.

Most motor traders were taken aback by the latest rises but some reasoned that it was a function of a small COE supply and confidence whipped up by a rebounding stock market and an apparent resolution to the euro debt crisis.

Both Mr Eric Chan, chief operating officer of Cycle & Carriage, and Mr Ron Lim, general manager of Nissan agent Tan Chong Motor, said the prices were totally unexpected. 'There is so much talk about the economy slowing down but no one seems to be heeding it,' added Mr Lim.

Mr Say Kwee Neng, managing director of BMW agent Performance Motors, said overall consumer sentiment appears to have improved.

Others said businesses which had delayed buying new commercial vehicles were now coming in, in case premiums climbed even higher on the back of a big cut in COE supply. In the current quota period which started this month, commercial vehicle COE supply was slashed by 34 per cent - the biggest cut.

CHRISTOPHER TAN

[Musicwhiz]

Straits Times
Mar 8, 2012

COE prices down after festive spree

CERTIFICATE of entitlement (COE) prices eased in the latest tender yesterday, as the market moved to correct itself following a buying frenzy post- Chinese New Year.

Premiums across all categories were down, with the exception of that for cars above 1,600cc as COE prices in this category climbed 1.4 per cent to $79,304.

The premium for commercial vehicles fell 3.8 per cent to $50,009, while that for cars up to 1,600cc and taxis dipped 0.8 per cent to $56,551.

The Open COE, the category used mainly for cars, closed at $76,881, down 1.4 per cent.

Prospective motorcycle buyers also cheered yesterday; the premium for two-wheelers tumbled 25.9 per cent to $1,490 yesterday.

Most motor traders said they had expected some market correction after an unexplained spike in buying just after the Chinese New Year break, which sent prices climbing for four consecutive rounds.

Mr Ron Lim, the general manager of Nissan agent Tan Chong Motor, said: 'Now the feel-good factor has worn off and the euro crisis is coming back to haunt buyers again.'

The continued rise in premiums for cars above 1,600cc did not come as a surprise, given that this group of buyers are generally more resistant to market fluctuations and economic conditions.

'New launches such as the BMW 3 Series luxury cars have kept up the buying momentum too,' said Mr Lim.

A bigger price correction may come in the next few rounds of COE bidding, he said.

But Mr Teo Hock Seng, managing director of Hyundai distributor Komoco Motors, said he did not expect price changes to be drastic.

'There is still going to be a limited supply of COEs, so prices will stabilise at this high level,' said Mr Teo.

IRENE THAM

[Musicwhiz]

Probably it can breach $80,000 the next round?

Business Times - 08 Mar 2012

Big car COE rises to $79,304 while others slip a little

Dealers say premiums would have been higher but for a glitch that slowed bidding

By VEN SREENIVASAN

DESPITE a technical glitch which, dealers say, prevented more applications from being submitted, Certificates of Entitlement (COE) premiums for big cars hit a new high at $79,304 in the latest bidding.

Meanwhile, those for small cars, Open Category and goods vehicles slipped slightly, but remained close to their recent highs.

While luxury brands and sellers with better margins aggressively bid for the Category B larger car COEs, the COEs for Category A, comprising sub-1,600 cc cars and taxis, slipped by $458 from the last bidding exercise to $56,551 this month.

The COEs for Category E or Open Category vehicles slipped $1,119 to $76,881.

The COEs for goods vehicles and buses (Category C) was $50,009, a $1,995 slide from February's second bidding exercise.

The latest numbers translated into a Prevailing Quota Premium of $57,009 for Cat A vehicles; $78,189 for Cat B; $52,004 for Cat C; and $78,000 for Cat E or Open Category.

Industry players said the COE premiums could have been even higher if not for a technical glitch which slowed down the bid submissions.

Still, aggressive bids from sellers of premium brands such as BMW, Mercedes Benz, Audi and others are believed to have boosted the Cat B COE to its peak.

Also in the mix were luxury car dealers, who represent brands such as Ferrari, Lamborghini and Porsche.

'Many of the premium brands, particularly the European premium marquees, command better margins due to the weaker euro,' explained Say Kwee Neng, the MD of Performance Motors which sells BMW cars. 'Also, some of these brands are imported by the principals themselves. And when these factors offer you a wider margin, you have a greater ability to bid aggressively for COEs. This will shift the equilibrium upwards.'

Volkswagen and Mercedes Benz are imported by their principals. In the case of VW, margins are further boosted by the fact that it is also the distributor of the cars here.

Meanwhile, BMW has just launched the latest version of its wildly popular 3-series. With a significant number of new models being launched in the coming months, few industry observers expect COEs to pull back anytime soon.

[Musicwhiz]

The Straits Times
Published on Mar 21, 2012
COE prices for bigger cars breach $80,000 mark

By Christopher Tan

Certificate of entitlement (COE) prices for bigger cars breached the $80,000 mark at the latest tender on Wednesday - a level not seen since the mid-1990s.

The other premiums ended mixed, but were still decidedly firm.

The premium for cars above 1,600cc closed at $82,003, up from $79,304. Open COE, which can be used to register any type of vehicle but ends up mainly for bigger cars, rose from $76,881 to finish at $80,101.

These premiums are the highest since the mid-1990s.

COE for cars up to 1,600cc and taxis ended at $56,501, relatively unchanged from $56,551 seen two weeks ago.

The rate for commercial vehicles ended at $51,511, up from $50,009 previously. Motorcycle COE ended at $2,000, up from $1,490.

Industry watchers attribute the latest results to the launch of the new BMW 3-series, which has traditionally been the volume seller for BMW.

[Musicwhiz]

The Straits Times
Apr 5, 2012
COEs rise to $84,600

CERTIFICATE of entitlement (COE) prices continued to defy gravity in the latest tender yesterday.

The premium for cars up to 1,600cc and taxis rose 3.5 per cent to end at a 15-year high of $58,501. The one for cars above 1,600cc inched upwards by 2.1 per cent to hit an 18-year high of $83,700.

The Open COE, which can be used for any type of vehicle but ends up mainly for bigger cars, posted the biggest rise of 5.6 per cent to land at $84,590.

Commercial vehicle COEs climbed 4.8 per cent to reach a new high of $53,989. Only motorcycle COEs bucked the trend, dipping 5.2 per cent to $1,896.

COEs are now at their highest since 1994. Late that year, the COE premium for cars above 2,000cc hit $110,500 and that for the Open category, $95,986.

Motorists must secure a COE at fortnightly auctions before they can own a vehicle here. Each COE is valid for 10 years.

Motor traders said the COE for cars up to 1,600cc would have ended lower if not for aggressive bidding by taxi companies.

ComfortDelGro, the largest taxi operator here, and SMRT put in a total of 190 bids in the last 10 minutes of the tender. Their bids were above $58,000. Taxi firms have been submitting strong bids as they are procuring bigger cabs for their expanding fleets. These cabs fetch higher rentals from cabbies.

Continued strong demand from luxury car buyers is also fuelling the other two car COEs. Recent and imminent launches of high-end cars are also a factor.

Tan Chong Motor general manager Ron Lim said the fact that Open COEs ended appreciably higher than big-car COEs means the industry expects premiums to go even higher soon.

Open COEs, being transferable, are bought and sold in the market. If traders expect COEs to fall in the short term, they would not bid too aggressively for Open category certificates.

CHRISTOPHER TAN

[Musicwhiz]

The sky's the limit! Thanks to the super-rich here who wouldn't bat an eyelid forking out $84,000 for a piece of paper, everyone else has to bear the brunt of super-high entitlements just to OWN a car!

Business Times - 05 Apr 2012

Launch of luxury models lifts big car COE prices

By SAMUEL EE

THE big car COE premium continued to rise, buoyed mainly by the launch of new luxury models.

According to some motor distributors, the arrival of the BMW 3 Series and Lexus GS sedans is behind the surge in the premium for Category B certificates of entitlement.

Yesterday's COE tender, the first for April, saw Cat B - for cars above 1,600cc - climbing $1,697 to $83,700. Cat B has been steadily appreciating since the start of this year and is now almost $18,000 higher than it was after the first tender of 2012. It is now hovering at a level last seen 17 years ago for a similar big car category.

'A couple of other luxury makes, as well as the new Toyota Camry, are also attracting good orders,' said one salesman who works in the Leng Kee Road motor belt. 'But if you ask me, it is really the small quota that is forcing premiums up.'

The director of a small European dealership said the mass market has been quiet over the last two weeks because most volume buyers are facing affordability issues. He said: 'For this group of people, the monthly instalment has doubled from a couple of years ago.'

Over at a Japanese dealership, its sales manager said he was surprised at the hike in passenger car premiums. 'I don't understand why COE prices have gone up so much. Only the motor firms can afford to bid so high, not the car buyers themselves,' he said, explaining that sellers of luxury models usually have bigger profit margins to bid for COEs.

Cat E - the open category which currently tracks Cat B - jumped $4,489 to $84,590. Cat A - for cars below 1,600cc - surged $2,000 to $58,501. The sales manager cited the strong sales of the Mercedes-Benz C180 sedan with a 1.6-litre engine as the likely reason for the hike. 'In general, demand for small cars is weak although the taxi companies came in with some aggressive bids,' he said.

Cat C - for goods vehicles - rose $2,478 to hit an all-time high of $53,989, while Cat D - for motorcycles - was the only category to post a decline; it slipped $104 to $1,896.

[kazukirai]

The sky's the limit! Thanks to the super-rich here who wouldn't bat an eyelid forking out $84,000 for a piece of paper, everyone else has to bear the brunt of super-high entitlements just to OWN a car!

We haven't hit historical highs yet! According to Wikipedia at least: 1994-S$110,500

Anyone wants to predict if and when we'll get there again?