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20-11-2010, 06:10 AM
So, who's game for buying a new car or is thinking of changing cars? 
Nov 20, 2010
Car dealers jack up prices
Prices climb to 10-year highs on back of rising COE premiums
By Goh Chin Lian
CAR prices have climbed to what motor traders say are 10-year highs, a day after a spike in certificate of entitlement (COE) premiums. And there is room for further price hikes in the coming months, they say.
Motor traders for makes such as Toyota, Nissan, Hyundai and Subaru raised prices yesterday. Cars of 1,600cc now cost up to $5,000 more and most larger cars are now up to $3,500 more expensive, against prices before Wednesday.
These increases mirror the COE premium increase of $5,000 for small cars and between $2,000 and $4,000 for larger cars, to levels not seen since 2000 as dealers rushed to meet annual sales targets ahead of a likely quota cut in February.
They also build on an earlier round of increases in March, when car prices went up by as much as $22,000 - a day after COE premiums soared by $8,000 to $14,000. That hike was in anticipation of a drastic cut in the supply of COEs from April this year.
This time around, Toyota agent Borneo Motors, the biggest player, is charging $5,000 more for its 1.5-litre Vios, a popular budget model, at $75,488, and 1.6-litre Toyota Corolla, at $89,488. The 2-litre Camry is priced at $123,488, up $3,500. These prices are 26 per cent to 30 per cent more than prices a year ago.
Subaru agent Motor Image Enterprises Group similarly raised prices by up to $5,000, while Hyundai agent Komoco Motors jacked up prices by $4,000, and Nissan agent Tan Chong Motor, up to $3,000.
Tan Chong's general manager Ron Lim said: 'On one side, we have to juggle with costs due to the strong yen. On the other side, the COE keeps rising.'
Car dealers are expected to line up promotions for the end of the year when potential buyers receive their bonuses, but they do not expect to be able to do much more to drum up sales of their cheaper and smaller cars.
Instead, Tan Chong plans to focus on selling its commercial vehicles. The market for these vehicles is more stable, with COE prices rising less than $200 in the latest round of bidding.
Another focus is on larger cars like its 3.5-litre and 2.5-litre Murano and 2-litre Qashqai models, said Mr Lim.
Buyers of these cars tend to have bigger budgets, can afford the price tag of around $114,000 to $168,000 and are less likely to be price-sensitive, he noted.
The COE also forms a smaller percentage of the overall cost of a luxury car than that for a budget car.
Motor traders expect sales of luxury cars such as Audi, BMW and Mercedes-Benz to still grow, while those of small cars like the Chery brand are expected to suffer.
Ms Linda Lim, marketing manager of Chery agent Vertex Automobile, said sales of its mostly small China-made cars have already taken a hit of 30 to 40 per cent this year, compared to last year.
Motor Traders Association president Teo Hock Seng said the high prices of new cars are a new reality, with the reduction in the supply of COEs.
Come February, the supply is widely expected to shrink further, with fewer cars being taken off the road.
The supply of COEs is fixed every six months based on the number of vehicles scrapped or re-exported in the preceding six-month period. The number of such deregistrations has been on the decline and even dipped in September below 3,000 for the first time in nearly a decade.
Consumers will end up having to decide whether they need to buy a car now or if they should take an alternative form of transport, Mr Teo noted.
He said: 'If you want to buy a car, that's the price to pay.'
More consumers may also turn to second-hand cars, whose COEs were obtained at a cheaper price, said the honorary secretary of the Singapore Vehicle Traders Association, Mr Raymond Tang.
The price difference of new and old cars has been widening for, say, a car such as the Toyota Corolla, from between $8,000 and $10,000 about eight years ago, to at least $20,000 today, he said.
He noted that the number of second-hand cars that changed hands has risen from fewer than 2,000 a month three years ago to 5,035 last month.
For the first time, second-hand cars also exceeded the number of new cars registered, which was 2,679 last month.
chinlian@sph.com.sg
Nov 20, 2010
Car dealers jack up prices
Prices climb to 10-year highs on back of rising COE premiums
By Goh Chin Lian
CAR prices have climbed to what motor traders say are 10-year highs, a day after a spike in certificate of entitlement (COE) premiums. And there is room for further price hikes in the coming months, they say.
Motor traders for makes such as Toyota, Nissan, Hyundai and Subaru raised prices yesterday. Cars of 1,600cc now cost up to $5,000 more and most larger cars are now up to $3,500 more expensive, against prices before Wednesday.
These increases mirror the COE premium increase of $5,000 for small cars and between $2,000 and $4,000 for larger cars, to levels not seen since 2000 as dealers rushed to meet annual sales targets ahead of a likely quota cut in February.
They also build on an earlier round of increases in March, when car prices went up by as much as $22,000 - a day after COE premiums soared by $8,000 to $14,000. That hike was in anticipation of a drastic cut in the supply of COEs from April this year.
This time around, Toyota agent Borneo Motors, the biggest player, is charging $5,000 more for its 1.5-litre Vios, a popular budget model, at $75,488, and 1.6-litre Toyota Corolla, at $89,488. The 2-litre Camry is priced at $123,488, up $3,500. These prices are 26 per cent to 30 per cent more than prices a year ago.
Subaru agent Motor Image Enterprises Group similarly raised prices by up to $5,000, while Hyundai agent Komoco Motors jacked up prices by $4,000, and Nissan agent Tan Chong Motor, up to $3,000.
Tan Chong's general manager Ron Lim said: 'On one side, we have to juggle with costs due to the strong yen. On the other side, the COE keeps rising.'
Car dealers are expected to line up promotions for the end of the year when potential buyers receive their bonuses, but they do not expect to be able to do much more to drum up sales of their cheaper and smaller cars.
Instead, Tan Chong plans to focus on selling its commercial vehicles. The market for these vehicles is more stable, with COE prices rising less than $200 in the latest round of bidding.
Another focus is on larger cars like its 3.5-litre and 2.5-litre Murano and 2-litre Qashqai models, said Mr Lim.
Buyers of these cars tend to have bigger budgets, can afford the price tag of around $114,000 to $168,000 and are less likely to be price-sensitive, he noted.
The COE also forms a smaller percentage of the overall cost of a luxury car than that for a budget car.
Motor traders expect sales of luxury cars such as Audi, BMW and Mercedes-Benz to still grow, while those of small cars like the Chery brand are expected to suffer.
Ms Linda Lim, marketing manager of Chery agent Vertex Automobile, said sales of its mostly small China-made cars have already taken a hit of 30 to 40 per cent this year, compared to last year.
Motor Traders Association president Teo Hock Seng said the high prices of new cars are a new reality, with the reduction in the supply of COEs.
Come February, the supply is widely expected to shrink further, with fewer cars being taken off the road.
The supply of COEs is fixed every six months based on the number of vehicles scrapped or re-exported in the preceding six-month period. The number of such deregistrations has been on the decline and even dipped in September below 3,000 for the first time in nearly a decade.
Consumers will end up having to decide whether they need to buy a car now or if they should take an alternative form of transport, Mr Teo noted.
He said: 'If you want to buy a car, that's the price to pay.'
More consumers may also turn to second-hand cars, whose COEs were obtained at a cheaper price, said the honorary secretary of the Singapore Vehicle Traders Association, Mr Raymond Tang.
The price difference of new and old cars has been widening for, say, a car such as the Toyota Corolla, from between $8,000 and $10,000 about eight years ago, to at least $20,000 today, he said.
He noted that the number of second-hand cars that changed hands has risen from fewer than 2,000 a month three years ago to 5,035 last month.
For the first time, second-hand cars also exceeded the number of new cars registered, which was 2,679 last month.
chinlian@sph.com.sg
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