COE Analysis August: Insecurities and Futures
SINGAPORE -
Earlier in July, the Land Transport Authority (LTA) announced the Certificate of Entitlement (COE) quota for the period August to October 2014. We've done an in-depth analysis of the situation here, but to summarise: Passenger car COEs are up, although overall the total number of COEs available went down.
COEs are what you need for any sort of vehicle here, so while Category A (cars with less than 1.6-litres or 95kW/130bhp) saw a 13 percent jump, and Category B (cars above 1.6-litres or 130bhp) saw a 4.55 percent increase, the overall COE quota dropped by four percent.
However in August's first round of COE bidding, all three categories (Cat A, Cat B and Cat E (the Open category) all saw significant increases across the board, in some cases with the largest price jumps seen so far in 2014.
READ MORE: CarBuyer's COE Analysis, August's First Round: Paranoid?
But if the quota is larger, shouldn't prices decrease because of a larger supply? Well the thing to note about the COE system is that with such a small number of certificates up for grabs each bidding round (twice a month), the COE system is very subject to 'mood swings' of buyers.
CarBuyer polled some industry insiders about the latest COE price jumps and had some interesting findings (see Read More, above). In the case of August's first round, it's the knowledge that overall, COE quotas are down and uncontrolled that may have prompted panic buying.
"I think we’re at a point where both the industry and buyers are very insecure about the entire system," said one sales manager for a German brand. "The Land Transport Authority is always talking about monitoring the (quota) situation, but not actually delivering any clear direction about long term management."
So while it's very clear that when it comes to product, Singaporeans don't hesitate to vote with their wallets, they've also had years of 'turbulence' to help hone their buying intuition. But as a catchy quote goes, "It's not paranoia if they're really after you."
READ MORE:
COE Analyis July 2014: 669 Reasons Why High COE Prices Won't Last
