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Old 13th February 2009, 10:27 AM   #1 (permalink)
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COE supply slashed

COE supply slashed
New 1.5 per cent cap on annual growth rate to remain for three years
By Christopher Tan, Senior Correspondent



-- PHOTO: AZIZ HUSSIN

CAR sellers and buyers will have to contend with far fewer COEs this year.

For the quota year April 2009-March 2010, there will be 83,789 certificates of entitlement - 24 per cent or 26,565 fewer COEs than the previous year.

The supply takes into account a new 1.5 per cent cap on annual growth rate of the vehicle population. If the previous 3 per cent cap were still in place, the COE quota reduction would have been around 12 per cent.

The new supply included adjusting for an oversupply of 10,103 COEs in the previous quota.

Despite calls from some MPs for the vehicle growth rate to be cut further on account of the weak economy, Transport Minister Raymond Lim said the 1.5 per cent cap will remain for three years before another review takes place.

He said it is important to make gradual changes 'so that people have sufficient time to adjust'.

Mr Lim also said the vehicle population growth rate 'should not be dependent on prevailing economic conditions, which are volatile'.

He said long-term factors such as the pace of road construction, public transport improvements and progress in road management technology are more critical.

The motor industry was not entirely surprised by the news.

Motor Traders Association (MTA) president Tan Kheng Hwee described the fresh quota as 'within expectations' and 'reasonable'.

Singapore Vehicle Traders Association president Neo Nam Heng said the used- car trade welcomes the cut.

'We hope COE prices will rebound and stabilise the market,' Mr Neo said. 'This will benefit existing car owners as well as improve the confidence of banks, so that they can start lending again.'

COE premiums have plummeted to historic lows in recent months. The worsening global economy and an abundant supply of certificates caused car COE rates to fall to as low as $2.

Mr Neo said if COE prices do not rebound, car resale values will slump. 'People may be able to afford a new car, but they can't afford to sell their existing car.'

Traders also said an uptrend in COE premiums would also put a check on premature scrapping of cars.

But the shrunken supply is worrying some distributors. Mr Koh Ching Hong, managing director of Toyota agent Borneo Motors, the biggest vehicle group here, said the cut 'is bigger than expected'.

Meanwhile, Minister Lim also announced that the formula for determining COE supply will be tweaked.

The current formula has often resulted in a drastically uneven vehicle population growth pattern over the years, as well as an oversupply and undersupply situation that has led to price swings.

Observers said that this had contributed to the worsening road congestion in recent years.

But Mr Lim noted that the supply formula had been working well over the long term. He said the compounded average growth rate of Singapore's vehicle population since 1990 had been within the 3 per cent prescribed by the COE system.

Source: http://www.straitstimes.com/Breaking...ry_337772.html

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Old 14th February 2009, 12:25 AM   #2 (permalink)
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Re: COE supply slashed

That will drive the COE price up.

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Old 15th February 2009, 12:03 AM   #3 (permalink)
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Car dealers not expecting spike in COE prices despite drop in annual quota

Car dealers not expecting spike in COE prices despite drop in annual quota
By Asha Popatlal, Channel NewsAsia | Posted: 14 February 2009 2248 hrs


SINGAPORE: While the annual Certificates of Entitlement (COE) quota for this year has been cut by 24 per cent, in line with the government's move to lower the annual vehicle growth cap, car dealers are not expecting a huge spike in COE prices just yet.

In the past, whenever a large cut in the number of COEs available is announced, there would be a large turnout at car showrooms, as people expect prices to go up.

But this time, with the economic downturn deepening, car dealers say they have seen only a small increase in numbers as many are adopting a wait-and-see attitude.

Ron Lim, Sales and Marketing general manager of Nissan said: "Right now at this point, consumer is still waiting for the reaction on the actual COE prices when the new quota kicks in. I think overall, people are still very cautious. They'll come in gradually and slowly take their time to evaluate the situation."

While COE prices are expected to rise between now and the end of the year, car dealers say they do not expect the increase to be significant. Rather, they say it is expected to increase gradually, reaching anywhere between S$3,000 and S$8,000 by year-end.

Part of the problem, of course, is tight financing.

Glenn Tan, Group chief executive of Motor Image Group said: "Basically, when they say I want to trade in my used car, how much can I get? - the value is almost nothing because the export market is practically dead.

"A lot of people used to export to European markets, but right now there is no demand for these cars. So if they cannot clear, they have to sell it to local market.

"But those days when COE was S$30,000, the value owing to the bank is larger than the market value of the car now, because the COE is so cheap. So no one can even afford to sell their cars."

As long the situation continues and people are not able to sell their used cars, dealers expect the situation to remain bad, especially for smaller cars - a category which recently saw COE figures plunge to a historic low of S$2.

http://www.channelnewsasia.com/stori...409087/1/.html

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Old 19th February 2009, 09:26 AM   #4 (permalink)
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COE prices up sharply after news of lower quota

COE prices up sharply after news of lower quota

By Satish Cheney, Channel NewsAsia
Posted: 18 February 2009 1658 hrs


SINGAPORE: Certificate of Entitlement (COE) prices have gone up across the board in the latest bidding exercise.

At the close on Wednesday, the premium for big cars jumped S$4,200 to S$4,889, while that for small cars rose S$3,440 to S$4,460. In the Open Category, where the COEs are usually used to buy cars, the premium went up S$2,889 to S$5,889.

For goods vehicles and buses, the COE price was S$1,600 higher at S$4,190. The premium for motorcycles meanwhile rose S$100 to S$801.

Car dealers said the jump in COE premiums was due mainly to the government's recent announcement that it will cut the COE quota this year by 24 per cent.

However, observers said the industry is struggling to maintain itself during the economic downturn.

Vincent Ng, product manager of Honda agent Kah Motor, said: "Most of us are selling our cars at little profit or no profit. I would even speculate that some of us are making some sales at a loss. So in the short term, it's not so good."

Car dealers said they expect the COE premiums to hover around the current levels, adding that it is unlikely there will be sharp spikes despite the impending cut in COE quota.

Source: http://www.channelnewsasia.com/stori...409826/1/.html

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Old 23rd February 2009, 12:41 PM   #5 (permalink)
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Re: COE supply slashed

so does it mean that although COE prices might increase drastically these 1-2 months (due to the announcement of a 24% cut in quota), but it will den fall/stabilise again further into the year?

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Old 23rd February 2009, 01:07 PM   #6 (permalink)
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Re: COE supply slashed

Originally Posted by shilin_87 View Post
so does it mean that although COE prices might increase drastically these 1-2 months (due to the announcement of a 24% cut in quota), but it will den fall/stabilise again further into the year?
Noone can know the market. From what I predict, Singapore will have the full impact of the economy come Sept and early 2010.

I predict the prices of COE will drop even further come Oct-Nov period.

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