By Leow Ju-Len and Hadi Soedarsono

AFTER A THREE-WEEK break between COE (or Certificate Of Entitlement) auctions, prices usually experience a noticeable bounce, but this time they barely budged.

When bidding closed on Wednesday the Category A certificate (for cars up to 1.6 litres, or taxis) stood at $14,685, while the Category B COE (for cars above 1.6 litres) ended the auction at $15,501.

Respectively, that meant a climb of $584 and $812 for both categories – not insignificant, but certainly not what the car market usually sees from a ‘three-week bounce’.

“Normally, COE prices spike more substantially after a three-week break, but not this time round,” says a sales manager we spoke to.

As for the Open Category COE (which can be used for any kid of vehicle), the price edged up just $202 to $15,661.

COE auctions usually open on a first and third Mondays of every month, leading to a two-week gap between them. However some months have five Mondays, resulting in an extra week before the COE market reopens after an auction.

June was just such a month, and the three-week break between the close of that month’s final COE auction (on June 18th) and this week’s auction meant that dealers would have had an extra week to book sales, and it’s this additional demand that usually drives the market up.

That it didn’t really happen this time is an indication of how quiet things have become in the car business.

Dealers we spoke to say that rising fuel prices and general inflation are mostly to blame.

“We spoke to some of the walk-in customers and they all say a car is no longer a necessity,” laments the sales manager for an American marque. “They would rather have money in the bank for rainy days.”

Nevertheless, even if buyers are in a sort of wait-and-see frame of mind, the general feeling is that if they feel as if there are genuine bargains to be had, they’re likely to sign on the dotted line.

“Most of them are waiting to come across an exceptionally good deal. Basically, if they find something they think is too good to pass up, they will commit,” says the sales manager.

Healthy sales at Champion Motors (the local Suzuki distributor) and Kah Motor (Honda) are evidence of that, says one source. A Honda spokesperson told CarBuyer that the company’s roadshows have been “well-received”, while a manager from Champion did tell us that people were still buying, even amidst the current mood of general caution.

One move that did raise eyebrows in the market happened on Monday, when Borneo Motors cut prices on some Toyota models by as much as $2,000. “I wonder why they did that,” said one general manager we spoke to, from a Japanese distributor. “I guess things are quiet, but it’s strange that they only cut their prices after the weekend.”

Perhaps it was an effort to present that ‘irresistible offer’ to customers, after a slow three weeks?

Nevertheless, most car dealers have held their prices steady in the aftermath of this week’s COE results, which suggests that the trade generally feels that the market isn’t about to change much.

This weekend could see a bit of extra buying activity at a Straits Times Classifieds sales carnival, but things will probably depend on what sort of economic news we received in the coming fortnight.

“Next round (prices) should be about the same, if things are looking well. If things are gloomy then the COE prices will come down, although it shouldn’t be by much,” says the sales manager for the American brand. “Only the buyers stand to gain in these circumstances. It’s the buyer’s market now.”

Category A – CAR (1600cc AND BELOW) AND TAXI: $14,685

UP $584

52-week high: $17,999
52-week low: $8,118
Quota: 2,036
Bids: 2,463

DESPITE AN EXTRA weekend-and-a-bit to collect orders, dealers collectively put in just 2,463 bids for a Category A certificate this week (versus 2,319 in the last COE auction). That small increase in quantity demanded will have helped to push prices up for sure, but historically the three-week bounce is usually higher than a couple of hundred dollars.

Some clearly expect higher prices in two weeks’ time, however. Borneo Motors has raised its rebate level for this to $13,000, for example, indicating that the management there feels confident that a Category A certificate are unlikely drop below that level. Last time out they had pegged that level at $12,000.

Category B – CAR (ABOVE 1600cc): $15,501

UP $812

52-week high: $19,802
52-week low: $13,114
Quota: 1,099
Bids: 1,383

A SIMILAR STORY Category B sees the extra week of selling result in marginally higher demand. 1,383 people tried to win one of these COEs this week, compared to 1,280 people in late June. If nothing else, the motor trade was right on the money with this category; last issue we wrote that there was “more to come” from Cat B, and that prices would rise slightly.

Perhaps things are less gloomy at the more expensive end of the car market. Audi enjoyed its best-ever month in June, for example, selling some 166 cars in the process. In any case, since we mentioned Borneo Motors’ decision to increase its COE rebate for Cat A, we might as well mention that it’s gone up by $1,000 to $14,000 for Cat B. Make of that what you will.

Category E – OPEN: $15,661

Up $202

52-week high: $19,510
52-week low: $13,301
Quota: 875
Bids: 1,258

PERHAPS THIS WEEK was an aberration, but the price gap between an Open certificate and the other car certificates seems to be narrowing. In April, the average price for a Category E COE was, on average, higher than that for categories A and B by $1,535.

In May, you could on average expect to pay $1,674 more for an Open COE than the average price for that month’s car certificates. By June, that premium had dropped to $1,375, and this time around the Open COE is just $568 more costly than the average price of the Category A and B COEs.

It’s hard to say exactly why this is the case, of course, but it might just be yet another indicator that the car trade isn’t feeling too confident about needing to have a transferable COE in hand at the moment.