COE Quota Changes From May-Jul 2014 to Aug-Oct 2014*
May 2014 to July 2014 Monthly quota
August 2014 to October 2014 Monthly quota
*Figures obtained from the Land Transport Authority.
In mid-July, the Land Transport Authority announced the latest Certificate of Entitlement (COE) quotas for the next three-month period. As is the trend recently, thanks to an increasing number of passenger cars reaching their 10-year COE lifespans, passenger car quotas went up, although overall the total quota for the period spanning August to October 2014 dipped by four percent.
Category A, the ‘mass market’ category (although that definition is increasingly inaccurate these days) for cars with less than 1.6-litres or 95kW/130bhp under the bonnet, saw the largest increase of 13 percent, from 1,011 to 1,143 COEs monthly. That was expected, given that traditionally, Cat A cars have made up the bulk of passenger automobile registrations here.
In contrast, Category B had a smaller increase of just 4.55 percent, but keep in mind that since the main input for the quota is de-registrations, in a sense they are reflecting population trends from 10 years ago.
That’s where the good news (for car buyers anyway) stops. The bad news is that two other categories saw significant drops — Cat C and D, or commercial vehicles and motorcycles. Cat C for example, sees a staggering 33 percent drop.
Motorcycles have been having a tough time for some time, too - January’s monthly quota was 992 units, compared to 686 units in the latest announcement - a reduction of 30.8 percent.
Obviously as a result of that, Cat C and D prices have been on a constant upward trend. 2014’s Cat C prices dipped to a low of $32,890 in April, far from the highest level of $56,302 in March, but now are on an upward trend again, hitting $43,390 in July’s first round. In July’s second round, that upwardly mobile price continued in a big way, with an increase of $8,620. To put that into perspective, it’s the largest single price increase amongst any of the categories for this entire year.
Motorcycle COE prices, likewise, have skyrocketed. To compare July 2009’s price of $800, the current price is a five-fold increase. Cat A COEs, in comparison, have ‘only’ more than tripled. We here at CarBuyer/MotoBuyer are partial to two-wheelers, so of course it’s upsetting.
Yet, it doesn’t affect car buyers, yes, so why should you care?
Well if you look at the number of adjustments that are made to the current COE quotas (read the addendum here but we warn you, it’s long and dry) you can see that the LTA has made some rather large boo-boos which we’re all still paying for.
Related to that point is the fact that COE quotas are very low (and prices accordingly high) because it was decided that the overall vehicle population in Singapore is too large. Currently, passenger car COE quotas are increasing because more cars are being de-registered. The same 'seasonal' tides will also affect all other categories too, but it's worrying that there still aren't any plans from the LTA to regulate COE supply over the long term (i.e more than 10 years).
Nevertheless, passenger car COE drops do put us on track with some of the predictions we made earlier. Category A hit a low of $60,002, but shot up to $65,689 between May’s first and second rounds, but has since saw consistent drops and only a slight increase at the latest bidding round. Cat B has seen a consistent downward price trend since its high of $84,504 in April and now sits at $65,001 in July’s second round. Since May, though, the two categories haven’t been more than $5,000 apart - which spells serious questions about whether the new categorisation mode is working or not.
PLG_AUTHORINFOBOX_FRONTEND_AUTHOR: Derryn Wong
Derryn Wong is currently editor-in-chief of CarBuyer and he enjoys probing all aspects of the motoring industry, ranging from bizarre holes in the upholstery to the engineered insanity of the COE system. No, not those kinds of holes.