Published April 23, 2009

COE premiums stay flat

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COE premiums stayed at roughly the same level as in the previous bidding exercise as the overall demand for new vehicles remained relatively steady, according to some motor distributors.

Yesterday's tender for certificates of entitlement was the second one in the new and smaller Quota Year 2009.

QY2009, from May 2009 to April 2010, has a total of 83,789 COEs or 24.1 per cent less than in QY2008.

The main categories such as Category A for small cars has been cut by 28 per cent, while Cat B big cars is reduced by 30.9 per cent. There is also a 12 per cent decrease for the open category, Cat E.

The tender had started slowly yesterday afternoon.

Cat A was the first to register any bidding interest, with the COE price approaching the $7,000 level with about an hour to go before the tender closed at 4pm.

The rest of the categories remained at the minimum bid of $1 until some action was detected in Cat B with about 45 minutes remaining.

At the end of it all, Cat A - for cars below 1,600cc - climbed $499 to $7,589, while Cat B - for cars above 1,600c - slipped $11 to $7,490 and Cat E - the open category - rose $463 to $7,789.

Meanwhile, Cat C - for commercial vehicles - was $692 lower at $6,610 and Cat D - for motorcycles - fell $164 to $889.

'Demand for less expensive cars seems to be propping up premiums,' said a senior executive at a mid-sized European dealership.

He explained that the economic downturn was benefiting cheaper Korean brands such as Hyundai and Kia, which are experiencing strong sales.

The executive added that some of the mainstream Japanese brands have been affected as a result of this shift in consumer preference.

A manager for a commercial vehicle brand said demand for goods vehicles was also stable, with some improvement in the ease of obtaining financing.

'Some of my customers can now get the loan quantum they asked for and in a slightly shorter time,' he said.