SINGAPORE
Today Online-June 21
Certificate of Entitlement (COE) premiums for big and small cars, as well as the Open Category, fell to their lowest in about eight years in the latest bidding exercise that closed on Wednesday (June 20).
The sharp drop is likely due to a change to the Vehicular Emissions Scheme that will take effect from next month, said motor traders.
From July 1, particulate matter will be included in the list of pollutants measured in the scheme, under which tax rebates or surcharges are given for new cars based on the amount of tailpipe pollutants released.
With particulate matter in the mix, more cars are likely to have tax surcharges. As a result, motor dealers are trying to place lower bids to try to cushion the higher prices that prospective buyers will have to fork out for the more pollutive models.
The situation is compounded by limited stocks, as dealers have suspended the import of certain models that would be pricier under the scheme.
Category B premiums for big cars (with an engine capacity of more than 1,600cc or a maximum power output exceeding 97kW) closed at S$33,900, the lowest since March 2010 and a 5.8 per cent dip from the last bidding exercise earlier this month.
Premiums for small cars (Category A; up to 1,600cc and 97kW) decreased to S$34,110, 6.4 per cent lower than the last round and the lowest since November 2010.
Premiums for the Open Category, which can be used for any vehicle type except motorcycles, sank 7 per cent to S$34,400, the lowest since March 2010.
Motorcycle premiums also decreased marginally from the last round, closing S$112 lower at S$6,889.
Only premiums for commercial vehicles (Category C) bucked the trend, inching up 7 per cent to S$32,001.
Under the Vehicular Emissions Scheme, which came into effect in January, vehicles are subject to a more stringent assessment regime, with four additional pollutants — hydrocarbons, carbon monoxide, nitrogen oxides and particulate matter — considered, in addition to carbon dioxide emissions.
Since Jan 1, all vehicles registered have been exempted from the particulate-matter criterion to allow motor dealers more time to submit information on such emissions for assessment, the authorities had said. But from July 1, all vehicles registered will be assessed on all five pollutants.
Mr Neo Tiam Ting, president of the Automobile Importer & Exporter Association (Singapore), explained that many vehicle models including hybrid cars will be affected by the new criterion. As a result, drivers buying these vehicles could end up with the maximum S$20,000 surcharge.
The low stock levels in the market could also have contributed to the drop in COE premiums, as buyers are unable to snag their preferred models.
Said CarTimes Automobile managing director Eddie Loo: “There are a lot of customers, but we don’t have the cars (they want).”
Parallel importers and distributors have held back on taking in models that would not meet the particulate-matter standards, many of which are from Japan and Europe, said Mr Neo.
He added: “For most of the Category A cars, consumers can accept prices of about S$80,000 to S$90,000 maximum. Let’s say car prices go up to S$100,000 or S$110,000 (because of the surcharge). Consumers will not consider them.”
He expects COE premiums to sink even further, as motor firms continue to place lower bids to try to keep car prices relatively low.
With uncertainties surrounding the purchase of new vehicles, more buyers may also turn to used cars, said Yong Lee Seng Motor managing director Raymond Tang.
NUMBERS AT A GLANCE:
Cat A: S$34,110
Cat B: S$33,900
Cat C: S$32,001
Cat D: S$6,889Cat E: S$34,400
