COE prices soar due to aggressive bids, smaller quota ahead

Certificate of entitlement (COE) prices ended higher all round in the latest tender yesterday as news of a smaller quota for November-January emerged.

COE premiums for cars up to 1,600cc and 130bhp rose by 12.1 per cent from two weeks ago to cross the $50,000 mark and end at $52,709, its highest since August 2016.

COE prices for cars above 1,600cc or 130bhp climbed 14.3 per cent to breach the $80,000 mark to close at $80,210, its highest since April 2014.

The premium for its proxy, the Open category, chalked the biggest increase of 16.8 per cent - or a whopping $12,244 - to finish at $85,000, its highest since November 2013.

Market watchers cite aggressive bidding by Tesla to secure COEs as its supply of cars surges after a slow start. The American car brand has overtaken MG as the best-selling electric vehicle make here, with more than 500 units registered as at the end of last month.

Unlike other brands, Tesla does not package its cars with COE. Instead it prices its cars without COE and then gets customers' approval to bid for a certain COE price - with an allowance for another 15 per cent.

Motor traders said this method almost ensures a steady rise in premiums as the company bears no risk even if premiums soar.

Elsewhere, commercial vehicle COE prices rose by 4.1 per cent to end at $40,501. The motorcycle premium chalked the smallest increase of 2.9 per cent to finish at $9,310.

The quota reduction for car COEs for the next three months is between 24 per cent and 34 per cent.

Mr Nicholas Wong, general manager of Honda agent Kah Motor, said: "I expected prices to go up, but going up by so much is out of this world.

"Now, the difference between Cat A (cars up 1,600cc) and Cat B (cars above 1,600cc) is nearly $30,000."

Mr Neo Nam Heng, chairman of diversified motor group Prime, said the COE supply is so small now that any small increase in demand will move prices significantly.

Mr Ricky Tay, managing director of Volkswagen Group Singapore, pointed out that the number of unsuccessful bids in the latest exercise translates to "almost 80 per cent to 90 per cent of the next allocation" of COEs.

Hence, "the next three months will be quite difficult for the automotive market", he said. - THE STRAITS TIMES