By Leow Ju-Len

“HAVE SINGAPOREANS LOST the mood to put themselves into new cars?” we asked a fortnight ago. Judging by the results of this week’s auction for COEs (or Certificates Of Entitlement), the answer is a resounding ‘yes’.

After take a significant dip in late April the market took another tumble on Wednesday, with the Category A certificate (for cars up to 1.6 litres, and taxis) fell a whopping $4,591 to $11,009.

Category B certificates (for cars above 1.6 litres) slumped less dramatically, dropping $1,621 to $15,889.

Meanwhile the Open Category Certificate (Category E, which can be used to register anything with wheels but usually tracks the car categories) lost $1,951 in value to end bidding at $16,500.

A fortnight ago it was gloomy sentiment that the car industry blamed for April’s dip in prices, and after that we (wrongly) thought that the fall in COEs would perk buyers up and send them back into car showrooms to sign deals and refloat the COE market.

That, and a surfeit of interesting new cars on the market, led CarBuyer (and some in the motor trade) to conclude: “Expect COEs to rise in a fortnight, then, or at least hold their value, unless things get really bad on a larger scale.”

With the egg wiped off our faces, perhaps it’s worth pondering if things perhaps have gotten really bad all round?

“Rice and cooking oil are up. Kopi is also up 10 cents,” laments one senior manager from a Japanese dealership, half-jokingly. “How to buy car now?”

The tone might have been in jest, but the sentiment was fundamentally serious. With the property market cooling down, oil prices hitting new record highs by the day and a general public concern about inflation, committing to a new car must be the last thing on the minds of many people are the moment.

This week’s COEs results are certainly evidence of that.

The worst thing that can happen now, from the point of view of the car trade, is that car buyers see COEs drop like this and conclude that a downward trend has started. When that happens, even genuine car hunters tend to stay on the sidelines and watch the market to ’see how low it will go’, and try to catch the bottom.

On the other hand, it’s not often you get a big drop like Category A’s $4,591 plummet, and when that happens, the bargain hunters come out to play.

Going from car dealers’ reactions to the COE results, a rebound in Category A is the expectation for a fortnight from now. Market heavyweight Borneo Motors, for example, has pegged the COE rebate level at $12,000 for Category A Toyota models. Roughly translated, that’s one way of saying: there is no way we expect a Cat A COE to cost less than 12 grand next time around!

One final point to ponder: all the COE categories fell this time around, except for Category D, which is for motorcycle certificates.

It’s enough to make us wonder if higher fuel prices – well, higher everything prices, really – have been the last straw for a significant group of motorists to turn their back on cars and jump on a bike instead.

Category A – CAR (1600cc AND BELOW) AND TAXI: $11,009

(DOWN $4,591)
52-week high: $17,999
52-week low: $8,118
Quota: 2,053
Bids: 2,211

IN TERMS OF the number of bids received, this week hasn’t been too bad for Cat A COEs, but the big dip in price indicates that dealer submitted fairly conservative bids. Don’t expect the 11-grand COE to stay, however.

Heavy-hitters like Borneo Motors reduced prices on Cat A models by just $3,000, despite the $4,591 fall in the COE premium itself. Then there’s the launch of the new Honda Jazz next week. A proven best-seller, it’s bound to help jazz up the market (sorry, we couldn’t resist).

Category B – CAR (ABOVE 1600cc): $15,881

(DOWN $1,621)
52-week high: $19,802
52-week low: $13,114
Quota: 1,101
Bids: 1,230

IF ANY END of the car market is immune to what’s happening with the economy in general, it has got to be Category B. You would imagine, say, a Geely buyer to fret about rising food and fuel prices much more than a Mercedes-Benz buyer, after all.

Perhaps that’s why this week the COE is down ‘just’ $1,621. In the coming weeks, it should be interesting to see how prices are affected by new market entrants like the Audi A4 (which looks like a winner) and BMW 1 Series.

Category E – OPEN: $16,500

(DOWN $1,951)
52-week high: $19,510
52-week low: $13,301
Quota: 886
Bids: 1,416

THE OPEN CATEGORY certificate might have gotten cheaper by almost two grand, but it’s clear that it’s a sough-after COE, judging from the 1,416 bids received for one this week. At $16,500, it’s also obvious that the market is willing to pay a small premium for these fully-transferable COEs.

And why not? This month sees a slew of new model launches: the Audi A4, BMW 1 Series, Honda Jazz, Chevrolet Aveo5, Subaru Forester, Perodua Viva, a seven-seater version of the Daihatsu Terios, and a Toyota Wish from authorised agent Borneo Motors, to name a few. Early bird buyers will want their cars right away, which is where Cat E COEs come in handy.