The COE Dilemma
For years, the Certificate of Entitlement (COE) has been the bane and boon of Singaporean motorists.
This unique system, catching the eye of international journalists from our neighbouring country all the way to other parts of the world, has left many potential car owners dismayed at escalating prices.
However, a recent announcement by the Land Transport Authority (LTA) might signal a momentary respite for them.
Image of cars on Singapore’s Road / PHOTO: ST FILE
The Numbers Game: An Unprecedented Shift
The forthcoming quarter, spanning November 2023 to January 2024, will herald an allocation of 12,774 COEs, marking a 13% upswing from previous periods.
The magnified focus falls on Categories A and C.
Category A: For the smaller, more accessible vehicles on our roads, the numbers present a promising tale. With an increase of 22% over the previous quarter, the year-on-year change stands at a staggering 81%.
This rise is expedited by an advance inclusion of 1,570 guaranteed vehicle de-registrations on their five-year renewal.
Category C: Those in logistics and transport sectors can anticipate more leeway. The quota for goods vehicles and buses grew by 35% from the previous quarter, marking a dramatic 124% increase year on year.
Screengrab of COE quota from November 2023 – January 2024 / LTA Website
Deciphering the COE Surge: Behind the Scenes
Such a pronounced upsurge doesn’t materialise from thin air. Breaking down the LTA’s announcement, the quota derives from three main factors.
- Vehicle Deregistrations: A chunky 25% comes from replacement COEs following vehicle deregistrations over the last year.
- Category C Growth: An earmarked 0.25% annual growth, gauged by the Category C vehicle populace as of December 2022, contributes to the pool.
- Varied Adjustments: Changes in taxi population, expired COEs, the Early Turnover Scheme for commercial vehicles, and redistribution from guaranteed deregistrations for Categories A and B all factor in.
Economic Implications: More Than Just Numbers
While the growth is noteworthy, the economic aftermath is nuanced.
Prices of COEs have skyrocketed recently, with the Open Category eclipsing the S$150,000 mark for the first time on October 4th.
Category B was not far behind, with a record S$146,002 in the same tender.
With COE’s intrinsic tie to supply and demand, this increase in availability might instigate a softening in prices, or at least a slowdown in their climb.
However, from a report by Straits Times, with dealers eyeing year-end sales targets and a forthcoming stricter emissions-testing protocol in 2024, the narrative is far from simple.
ROSLAN RAHMAN/AFP/AFP/Getty Images
Industry’s Perspective: Cautious Optimism
Even as the industry heaves a sigh of relief, experts are urging moderation.
An interview by Straits Times, Mr. Neo Nam Heng, affiliated with the Automobile Importer and Exporter Association (Singapore), encapsulates the sentiment: “While we should welcome the higher quota, it’s essential to remember that we’re advancing from a small base. Expecting a significant drop in COE premiums overnight might be premature.”
Moreover, the oscillations in COE availability and pricing have broader implications.
They influence consumer behaviour, dealer strategies, and even Singapore’s broader push towards sustainable mobility, like electric vehicles.
EV charging in Singapore / LTA Website
Looking Ahead: An Ongoing Saga
As we gaze into 2024, the landscape remains fluid.
The LTA anticipates a continued growth trend for Categories A, B, and C. Category D, meanwhile, is expected to mirror 2023’s trends.
The next chapter in this saga unveils in January 2024 with the LTA’s announcement for the February to April quota.
Until then, all eyes, undoubtedly, will be on the bids kicking off on November 6th, 2023.
Stay engaged with ROADS.sg as we navigate the intricate byways of Singapore’s ever-evolving motoring domain.
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