COE price for small cars plunges by 30%
By Maria Almenoar
CERTIFICATE of entitlement (COE) prices for small cars plummeted 30 per cent yesterday to $9,501, hitting their lowest levels in over a year.
The fall follows months of softening demand which dealers say has been driven by soaring inflation.
They blamed rising prices for everything from rice to fuel, along with a growing number of Electronic Road Pricing gantries, for keeping budget-conscious small car buyers out of showrooms.
‘This group of buyers are the hardest hit by the softening economy so they may reconsider big purchases like a car,’ said Mr Vincent Ng, the product manager for Kah Motor in Ubi.
In the latest bidding results released yesterday, the COE for cars under 1,600cc dropped from $13,289 to $9,501. It was the lowest mark since August last year, when it dove to $8,118.
Some analysts blamed high petrol prices, currently at $1.963 a litre for 92-octane fuel. That is a roughly 30 per cent rise over this time last year. Motorists have also faced about a 10 per cent rise in parking charges over the last year.
The president of the Motor Traders Association of Singapore, said new ERP gantries and a recent increase in charges may have also discouraged potential small car buyers. ‘Perhaps some marginal buyers have decided not to buy a car,’ said Ms Tan Kheng Hwee.
In July, several gantries were opened near the Singapore River and the Government announced plans to build another six across the island by November.
The move was part of a wide-ranging plan to relieve congestion and encourage more Singaporeans to use public transport.
The rising costs seem to be encouraging people to hang onto their cars for longer. In the first six months of this year, about 22,400 small cars were taken off the roads, compared with over 25,800 during the same period last year.
Inflation and ERP gantries, though, seem to be having less of an effect on larger car buyers. In the latest bidding yesterday, COE prices of cars 1,600cc and above fell, but by just over 3.5 per cent to $13,389. Prices for all other categories, however, increased.
The COE for commercial vehicles ended 7 per cent higher at $13,889 while the motorcycle premium ended 11 per cent higher at $1,452. The Open COE category - used mainly for cars - ended 2 per cent higher at $14,300.
Next month, the Government is expected to reduce the COE supply to compensate for the fact that fewer cars are being taken off the roads. Industry watchers say that will likely result in higher prices.
Source : Straits Times - 04 Sept 2008
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