The Straits Times
www.straitstimes.com
Published on Mar 29, 2013
Prices of big cars rise by up to $14,000
Traders pass on higher COE premiums; prices of small cars hold steady or drop
By Royston Sim And Jermyn Chow
THE prices of bigger, mass-market cars rocketed yesterday - some by as much as $14,000 - as motor traders passed on higher certificate of entitlement (COE) premiums from the latest tender.
The COE premiums for cars above 1,600cc had soared by 27.2 per cent since the tender closed on Wednesday to finish at $73,900, while the premium for Open COEs rose by 12.8 per cent to $73,301. The prices of smaller cars either held steady or went down after the COE rate for cars up to 1,600cc fell by 14 per cent to $64,209.
For instance, Toyota agent Borneo Motors reduced the cost of a Corolla Altis 1.6 from $133,988 to $127,988, but ramped up the price of the new Camry 2.0 by $10,000 to $178,988.
Kia agent Cycle and Carriage also raised prices for its larger cars. The Optima K5 2.0 now costs $14,000 more at $143,999.
Volkswagen did not change the list price of its Category A cars such as the Golf 1.4 TSI. A spokesman said it had dropped them in the last round in anticipation of the COE falling. But it has raised prices of its Category B cars such as the Passat 1.8 TSI by $5,000.
Audi did not make any price revisions. An Audi A6, one of its hot sellers, now costs $209,888.
Observers expect showroom traffic to remain healthy over the weekend and say there will be increased interest in smaller cars.
Mr Ron Lim, general manager of Nissan Agent Tan Chong Motor, believes COE premiums have not stabilised yet. He noted that loopholes which allow credit companies and other financial institutions to provide easy financing for car buyers have not been plugged.
Until this happens, the real impact of car loan restrictions will not be reflected, he said.
Meanwhile, used-car dealers continue to struggle and have turned to the authorities for help.
The Singapore Vehicle Traders Association (SVTA) office-bearers met the Monetary Authority of Singapore officials yesterday to discuss the loan curbs, which took effect on Feb 26 and capped loans to 50 or 60 per cent of a vehicle's purchase price. Second-hand vehicle prices have not shifted much after the latest tender, although some firms have increased the cost of bigger cars slightly in tandem with the higher premium.
Apex Trading managing director Thomas Lim said the volatile COE premiums make it difficult for dealers to tweak prices.
"We cannot push the prices of used cars up by much because the prices for new cars have already plunged so low after the curbs and the recent COE bidding results."
For instance, a one-year-old BMW 320 now costs $180,000, up from $150,000 before the latest COE bidding exercise.
Like most used-car dealers, Mr Thomas Lim is still reeling from the loan restrictions and has seen profits plunge by more than 60 per cent. "It's like a nightmare that gets worse every two weeks when COE results come out."
Yesterday's meeting, which lasted for about 75 minutes, began with the association explaining how the loan curbs had hit the used car industry hard.
SVTA vice-president Eddie Loo called the summit fruitful.
The MAS has told the association it will continue to monitor the market and find ways to help used-car dealers. It also reiterated that the curbs are not permanent, Mr Loo added.
He said: "Even though there were no solutions, they were willing to listen and engage us."
roysim@sph.com.sg
jermync@sph.com.sg