COE supply for Nov to Jan to fall by 13.8% to about 3,040 per month
The supply of certificates of entitlement (COEs) for the period between November and January 2023 will shrink by 13.8 per cent, with the quota for commercial vehicles taking the hardest hit.
In all, there will an average of 3,040 COEs available for bidding across the five categories each month for the next three months, the Land Transport Authority (LTA) said on Friday.
This is down from the 3,526 COEs available each month for the period between August and October.
Motor traders were expecting the quota to be reduced, but some were surprised at how much the supply will drop.
Most said COE prices are likely to go back up, but others were less sure.
COE premiums have soared in 2022, and remain elevated despite slipping in most categories in the previous tender.
It is the second time that COE supply is being calculated using a revised method introduced in July.
The quota for the next three months is now based on half the number of vehicle deregistrations in the previous six months, instead of taking the deregistrations from the previous three months alone.
This revision is aimed at reducing quarter-on-quarter volatility of the COE supply, while being responsive in returning the COEs of deregistered vehicles to the bidding pool, LTA had said.
The main factor determining COE supply is the deregistration rate.
With the latest calculations, there will be only 137 COEs available for commercial vehicles each month from November to January - a 17.5 per cent drop from the 166 available monthly now.
The monthly supply of COEs for smaller cars took the next biggest hit, falling by 15.7 per cent.
There will be 915 available each month for the next three months for internal combustion engine cars with up to 1,600cc and below 130bhp, as well as fully electric vehicles with up to 110 kilowatt of power.
In the current three-month period, there are 1,086 COEs each month.
For cars above 1,600cc or more powerful engines above 110kW, there will be 817 COEs available each month from November to January, down 12.9 per cent from 939 now.
The monthly supply of motorcycle COEs will also shrink, dropping by 12.7 per cent to 880 COEs from 1,008.
In the Open category, which can be used for all types of vehicles except for motorcycles, the quota will be reduced by 11 per cent to 291 COEs each month.
Earlier this week, The Straits Times reported that vehicle prices are set to stay high in the coming months as the low number of deregistrations between April and August pointed to a fall in the COE supply in the coming quota period.
Ms Sabrina Sng, managing director at Wearnes Automotive in charge of Swedish electric vehicle brand Polestar, said earlier this week that a lower COE supply is not a surprise.
She said vehicle prices are still high and customers who cannot afford to buy now will not scrap their current vehicles early.
Kah Motor general manager Nicholas Wong said the drop in COE supply for the next three months is quite substantial, but the industry has mostly factored it in.
The big unknown is how much demand there will be from commercial fleet owners who are looking to replace vehicles or use them as private-hire cars.
Still, based on current demand from retail customers, which has been slow, the shrinking COE supply is unlikely to cause COE prices to rise, Mr Wong added.
But for motorcycles, premiums are likely to continue to head north, said Mr Rex Tan, president of the Singapore Motor Cycle Trade Association.
This is despite the COE price for the category hitting a new record high of $11,751 at the last bidding exercise on Oct 5.
Demand for motorcycles has not waned, he added.