SINGAPORE - More Certificates of Entitlement (COEs) will be available for the six-month period starting next month, with more COEs on offer for big cars than smaller ones for the first time.
The supply of COEs for cars will increase by 14 per cent, according to the figures released yesterday by the Land Transport Authority (LTA). The monthly COE supply for small cars (1,600cc and below) will rise by 9.15 per cent to 728, while that of big cars (above 1,600cc) will see a 23.31 per cent surge to 746.
In the open category, where COEs can be used for any category but are usually used for big cars, the COE supply will see a 9.7 per cent increase to 522 each month. There will also be 63 more COEs for commercial vehicles each month, but motorcycles will see 51 fewer COEs — the only category that witnessed a drop.
The quota takes into account the 0.5 per cent vehicle growth rate, vehicles deregistered in the last six months, as well as adjustments for the change in the taxi population, expired COEs and over-projections of vehicle deregistrations in 2008 and 2009.
The increase in the supply of COEs is driven largely by a surge in deregistration over the last six months. In the first six months of the year, 19,349 vehicles were scrapped, compared with 16,133 in the previous six months. Specifically, 48.18 per cent more small cars and 38.33 per cent more big ones were scrapped in the last six months, when compared with the previous six.
The number of vehicles reaching the end of their decade-long COE is expected to continue to grow over the next one to two years, offering the prospect of more COEs in the future.
Despite the increase in supply of COEs for cars in the next six months, motor traders felt car buyers should still brace themselves for high COE premiums, as they cited pent-up demand that outpaces the number of COEs available.
“The rise in number is minimal and I believe it is still not enough to satisfy the demand by the market currently,” said Mr Raymond Tang, Honorary Secretary of the Singapore Vehicle Traders Association.
Mr Ron Lim, General Manager of Nissan agent Tan Chong Motor, expressed concerns over the supply of COEs for big cars outstripping that for smaller ones.
“It contradicts what the LTA is trying to achieve, which is social equity, as the numbers do not make mass-market cars in Category A more accessible to those who need them,” he said.
The Government is currently considering ways to make the vehicle quota system more socially equitable, with the LTA looking at refining the COE system, so that the small-cars category could “better retain the original purpose” of catering to buyers of mass-market cars. Besides the COE system, the LTA is also looking at whether to levy surcharges for multiple car ownership.
Mr Tang also felt that mass-market buyers could be squeezed out as buyers of luxury makes in the small-cars category rush in to secure their vehicles before the Government introduces changes.
Dealers expect some buyers to remain on the sidelines at next week’s bidding exercise.
“We can expect some correction of prices in the next round as buyers may hold back as they wait for the new quota to kick in,” said Mr Lim.
Article by Sumita D/O Sreedharan