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A Minisrty For Trnasport Spokesman - Tan Ah Chee

Nowhere in the world do you find a city like ours. From a backwater fishing village with bicycles as the primary mode of transport, we gradually evolved to $100,000 Corollas. Nationalism was created with our "Vehicle Ownership Scheme".

The car ownership experience is a powerful way of bringing people together, and in rooting people to the larger community. Beyond providing basic transportation needs, the Ministry also build ERP gantries to facilitate smooth travel.

Over the years, the Ministry reviewed its policies regularly to meet the evolving needs of Singaporeans. For instance, the Ministry sensed that the 7 year loan was pricing many young aspirants out of the market. This led to a whole new slew of rules & regulations designed to make sure that car ownership is affordable to the people by using the DSR (debt service ratio). We now boast one of the highest penetration rates for car ownership in the world.

The Ministry believed firmly that “this was a scheme that would give every citizen, every family, a stake in the wealth of the country as it developed.” Today, the car is a valuable asset to many Singaporeans.

Moving forward, the Ministry expressed optimism that the car is an “asset” which will continue to appreciate in value so long as Singapore’s economy is doing well. One can also monetize their asset for retirement by downgrading to a smaller car such as a Porsche from a Lamborghini. To facilitate downgrading, we will continue to invite more car manufacturers into the city, recent entrants such as the Tata & the Chery have widen the reach for many Singaporeans. Gone are the days where one has to trudge endlessly simply to be able to attend school.

There have been suggestions that the Ministry should implement 20 year COEs to further improve affordability as well as the inclusion of a Lease Buyback Scheme. The Ministry takes all feedback seriously and are now considering the merits of this case.

My Singapore, Now & Forevermore!

Jan 20, 2011
Taxis drive up COE premiums

CERTIFICATE of entitlement (COE) premiums ended expectedly lower for the most part at the latest tender yesterday, as news of a smaller-than-expected cut in quota sank in.

What was unexpected though was an increase in the premium for cars up to 1,600cc and taxis, which hit $40,123, up by 3.2 per cent.

'It's a huge surprise,' said Mr Philip Lu, general manager of Mazda Singapore. 'The car market was actually very, very quiet.'

Motor traders said aggressive bidding by taxi companies SMRT, CityCab and Comfort in the last half-hour pushed up premiums. They together submitted about 350 bids - or one-third of the total bids made in the category.

'If not for these bids, COE for the smaller cars could have been below $30,000,' one car dealer noted.

The COE premium for cars above 1,600cc ended at $58,910, down 14.6 per cent. The premium for the Open category, used mainly for bigger cars, fell by 11.6 per cent to $67,009.

Commercial vehicle premium was down 14.6 per cent, closing at $30,000, while the motorcycle COE premium hit a high of $1,690, up 12.4 per cent.

Motor traders said the car market is deflated after the buying frenzy towards the end of last year.

'Whoever needed to buy a car for Chinese New Year has already bought one,' said Mr Lu. 'There is no more rush now.'

Industry observers said last week's announcement by Transport Minister Raymond Lim that a scheduled cut in COE supply this year would be spread out over three years had also changed consumer sentiment somewhat.

This is despite the fact that the number of car COEs will still be lower by as much as 15 per cent from next month.

'Buyers are now asking if prices will fall further,' Mr Lu said.

So, should consumers who bought cars last month - when COE premiums were well over $70,000 - have waited?

Mr Say Kwee Neng, managing director of BMW agent Performance Motors, said those customers were not out of pocket as there had been heavy subsidies then.

Nevertheless, he expects BMW prices to be 'reduced by a tad' this week.

CHRISTOPHER TAN

Feb 24, 2011
COE prices jump again

CERTIFICATES of entitlement (COEs) have made a strong rebound after a post-festive lull two weeks ago.

At the latest tender yesterday, premiums ended higher across the board. Three out of five categories had double-digit percentage gains.

COEs for cars up to 1,600cc shot up by 15.8 per cent to close at $42,999 - one of their highest levels in the past 12 months.

Those for cars above 1,600cc were 16.1 per cent higher at $62,000, also among the highest. Open COEs, which can be used for any vehicle type but end up mainly for cars, climbed 5.3 per cent higher to end at $62,001.

Mr Chan Kee Min, senior manager at Cycle & Carriage Kia, attributed the strong rebound to healthy sales.

'A lot of people were distracted or away during Chinese New Year,' he noted. 'Now, they are a bit more settled and have started shopping for cars again.'

In any case, he said the COE supply 'is so small now that any fluctuation in sales will move premiums'.

He also noted that the rising number of luxury models in Category A (cars up to 1,600cc) is also bolstering the premiums.

Makes which have started offering models up to 1,600cc include Mercedes- Benz, Volvo, Citroen and Audi.

At yesterday's launch of the Audi A1 - the manufacturer's first Category A car in more than a decade - Audi Singapore managing director Reinhold Carl described the COE situation as volatile.

'When premiums fall, buyers will come in, which will cause premiums to rise. And then, people will stop buying, causing premiums to fall again,' he said.

'There is no doubt that the COE supply is just too small now.'

Meanwhile, premiums for commercial vehicles went up 1.5 per cent to $29,011, and motorcycle COEs were 10 per cent higher at $2,001 - the first time they have breached $2,000 since 1997.

Singapore Motorcycle Trade Association president Wilson Phoon said: 'One of the reasons for this is that car COE prices have gone up so high that some buyers are now going for motorbikes instead.'

CHRISTOPHER TAN

Cars are for folk who earn like $7,000 or $8,000 per month (double the median income level for Singaporeans). With COE prices hovering at these levels, the normal man on the street cannot affordone comfortably.

Mar 9, 2011
COE prices hold steady from recent highs

CERTIFICATE of Entitlement (COE) premiums have held steady in the latest tender exercise which closed on Wednesday.

The COE premium for cars above 1,600cc (Category B) ended at $61,894 - a drop of $106 or 0.17 per cent.

For the Open category COEs, which can be used for any vehicle type but which typically end up being used mainly for bigger cars, the premium registered a 0.01 per cent rise to $62,010 (from $$62,001).

Premiums for Category A or popular cars of up to 1,600cc, fell to $42,600 from $42,999, or 0.93 per cent.

Motorcycle premiums rose, landing at $2,604 from $2,001.

Commercial vehicle COE premiums ended higher at $30,001, from $29,011.

With COE prices ridiculously high, the second hand market looks more and more enticing. I wonder whether there is an investment opportunity here.

(10-03-2011, 11:55 AM)vader1671 Wrote: [ -> ]With COE prices ridiculously high, the second hand market looks more and more enticing. I wonder whether there is an investment opportunity here.

Investment opportunity? The last time I heard when this happened was in the mid-1990s when speculators bid up the price of COEs in order to make a quick buck. That was when prices hit the roof at >S$100,000, then quickly collapsed. I doubt it it going to happen again anytime soon unless there is a drastic cut in supply.

Then again, with election looming so close, you never know what might be announced!

Mar 24, 2011
COE prices fall amid Japan supply fears

CERTIFICATE of entitlement prices tumbled at the latest tender yesterday, as concerns over the supply of Japanese vehicles dampened bids.

The exception was the COE premium for cars up to 1,600cc, which rose once again as a result of aggressive bids by taxi operators. It ended 2.8 per cent higher at $43,813.

Two taxi companies took part in yesterday's exercise. SMRT, which submitted 99 bids, missed securing any by $1, while Trans-Cab submitted 60 bids of $46,000 each and got what it wanted.

Elsewhere, caution prevailed as dealers representing Japanese brands are still unsure when vehicle production will resume or return to capacity.

Several plants have shut since the March 11 quake and tsunami damaged factories, roads and railways, disrupting a complex supply network that Japan's commerce depends heavily on.

COE prices for cars above 1,600cc suffered the biggest knock, ending at $57,002, or 7.9 per cent lower.

The open COE, which can be used for any vehicle type but which ends up being used mainly for bigger cars, slid by 4.7 per cent to close at $59,073.

The commercial vehicle COE price dipped by 1per cent to $29,690, while the motorbike premium fell by 2.7 per cent to $2,534.

Traders said bids were especially conservative for the open COE because these certificates can be kept for only three months before they have to be used to register a vehicle. The other car COEs can be kept for six months.

The Straits Times understands that a handful of parallel importers who have open certificates in hand but are facing a delay in vehicle shipment might appeal to the Land Transport Authority for an extension.

The cautious mood has spread to Category B (for cars above 1,600cc), because bidders in this category make up the bulk of open bidders.

Mr Jacky Wong, director of Toyota parallel importer Richburg, said that even if manufacturers in Japan resume production, it may take time for things to return to normal.

'How fast can they catch up with the backlog of orders?' he asked.

CHRISTOPHER TAN

Even though prices have "softened", it still remains a dream for many earning just a median income to affordably own a car!

Business Times - 07 Apr 2011

COE premiums soften across the board

By SAMUEL EE

COE premiums softened across the board yesterday as interest in new cars seems to have plateaued for the moment.

The first bidding exercise of April for certificates of entitlement resulted in Category A - for cars below 1,600cc - slipping $601 to $43,212, while Cat B - for cars above 1,600cc - shed $2,001 to $55,001. Cat E, the open category, fell $1,973 to $57,100.

Elsewhere, Cat C for goods vehicles eased $1,501 to $28,189, while Cat D for motorcycles was down $44 to $2,490. 'It's been a quiet couple of weeks,' said a senior executive with a major multi-franchise dealership. 'Both for Cat A and Cat B models.'

One manager with a Japanese brand added that some distributors may also be facing 'stock issues'.

'Since the cars are not in Singapore yet, these distributors may not be bidding as aggressively for COEs as they normally would,' he explains.

The rising price of petrol could also be weighing on buyers' minds, he said.

'One thing is for sure, many of them don't appear to be in a hurry. They don't mind waiting for COE premiums to go lower . . . They will hold back because they expect it to drop even further.'

One car dealer says the Cat A premium would have been lower if not for a last-minute push by two taxi operators to secure almost 20 per cent of the 512 COEs available yesterday.

'Otherwise, it would have been at least a couple of thousand dollars lower,' he said. Going forward, he expects Cat A to remain strong because of taxi companies' demand for COEs, as well as an influx of new Cat A models from Continental makes.

'Most European manufacturers now (have) a foot in the Cat A market,' he said, referring to 1.6-litre models such as the Volvo S80, Mercedes-Benz C180, Peugeot 508 and Citroen C5. Audi A1 is also in this category though its engine is 1.4 litres. 'All these will have a significant impact on the Cat A premium.'

Good news for VICOM shareholders? (Not vested in VICOM)

Apr 14, 2011
Car deregistration slows down further
Q1 figure at lowest since 1990; dealers expect tight COE supply to shrink even more
By Christopher Tan, Senior Correspondent

THE number of cars taken off the road - either to be scrapped or re-exported - has slowed to a crawl in the first quarter.

This does not bode well for car buyers and sellers. The deregistration figure will largely determine the supply of certificates of entitlement (COEs) - already at close to its lowest ever - in the next six- monthly quota starting in August.

According to data released by the Land Transport Authority (LTA) yesterday, 4,124 passenger cars were deregistered in the first three months of the year - 10 per cent fewer than in the preceding three months, and merely half the number taken off the road from January to March last year.

On a monthly basis, February saw an all-time low of fewer than 1,000 cars deregistered.

Although the figure climbed to 1,856 last month, the first quarter's cohort of cars scrapped or re-exported still stands as the smallest since the COE scheme was introduced in 1990.

Mr Raymond Tang, secretary of the Singapore Vehicle Traders Association, said: 'Based on what we can see now, the supply will definitely be cut.'

Vehicle buyers in Singapore must first obtain COEs, which are auctioned twice a month. Recent bid prices hover around $43,000 for smaller cars and $55,000 for bigger models - nearly double the rates at the same time last year, because COE supply had already contracted since.

Each COE is valid for 10 years.

Many in the motor industry are already bracing themselves for the leanest year in recent memory.

Mr Victor Tan, general manager and director of Suzuki distributor Champion Motors, said the total market size for cars and commercial vehicles this year is expected to be around 38,000, down from 52,000 last year.

Between 2003 and 2008, the average annual sales volume was around 120,000.

Motor traders and observers say the industry could be caught in a vicious circle, where the shrunken COE supply pushes up their premiums, and the high rates then encourage motorists to hold on to their existing cars longer, so pulling deregistration numbers lower.

But Mr Vincent Ng, product manager of Honda agent Kah Motor, said deregistrations may pick up in the coming months. He pointed out that cars turning 10 and those turning 20 this year are likely to be scrapped.

LTA figures show there are around 7,000 such cars. However, their owners can extend the lifespan of these cars by paying the prevailing quota premium.

If the majority of these cars are taken off the road by July, the next six-monthly COE quota starting from August should shrink by no more than 10 per cent, Mr Ng indicated.

'The only thing is, those cars belong mainly to Category A,' he added, referring to the COE category for cars up to 1,600cc and cabs. 'So, good news for small cars and taxis.'

If that happens, the price gap between Category A and B (for cars above 1,600cc) may widen further. The gap is currently around $15,000.

Motor Traders Association vice-president Michael Wong said: 'We have a few more months before August, so the deregistration figure could pick up.'

Mr Leon Gumpert, general manager (sales) at Volkswagen Singapore, concurred. 'While the number of deregistrations in the first quarter was slightly below our initial projections, we cannot say for sure if this is a clear trend moving forward.

'Thus we will not be adjusting our sales projections as of now. We will continue to monitor the situation and make any necessary decisions later in the year.'

christan@sph.com.sg