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Commercial Vehicle COE Premiums Slide 27 Per Cent
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December 7th, 2017 | 11:35 AM | 1243 views
Certificate of Entitlement (COE) premiums for commercial vehicles plunged at the close of the latest bidding exercise on Wednesday (Dec 6), a sign that dealers have managed to "clear off stock" for models that will be outlawed when new emission standards set in next year.
The premiums for Category C (goods vehicles and buses) fell to S$42,000, down 27.2 per cent from the previous exercise (S$57,701).
Premiums for commercial vehicles had been on a rebound from a nosedive in the middle of this year, and had remained above S$48,000 since October.
Prices tumbled to their lowest in almost six years during the last bidding exercise in April, just before a bumper supply of COEs for this category of vehicles kicked in in May.
The average monthly quota for Category C had leaped six-and-a-half-fold to 6,506 from May to July, up from 997 from February to April. The quota hike came about because of the large number of de-registrations in the preceding quarter, which was in turn due to the high number of COEs renewed in 2007 as a result of a shortage in the supply of new Euro IV diesel goods vehicles, the Land Transport Authority had said.
Motor dealers TODAY spoke to said the latest slide in premiums for commercial vehicles could be due to dealers having already "cleared off their stock" of diesel vehicles that are not compliant to more stringent emission standards that will be in place next year.
From January, dealers may sell only diesel vehicles that meet Euro VI standards. This requirement had set in for petrol vehicles in September.
Mr Neo Tiam Ting, president of Automobile Importer & Exporter Association (Singapore), said he expects COE premiums to climb in the next cycle, in light of a relatively smaller quota, but "not by too much".
"Demand may drop when stricter emission standards set in next year," he said.
Director of Yong Lee Seng Motor Raymond Tang said dealers are likely to have fulfilled orders while the vehicle stock for Euro VI may not have arrived.
Mr Reuben Ang, managing director of catering company Elsie's Kitchen, said the drop provides an "incentive" for businesses to renew their aging fleet.
"However, businesses in general would plan their fleet requirements based on strategic business needs rather that COE prices which are difficult to predict," said Mr Ang.
Mr Lai Chang Wen, chief executive of local delivery service Ninja Van, added: "Lower prices translate to more affordable delivery costs, which are beneficial to both consumers and businesses."
On Wednesday, COE premiums also dipped for all other categories, except motorcycles, which went up by 9.3 per cent to S$6,552.
Prices for small cars in Category A (up to 1,600cc) recorded a dip of 9.5 per cent, from S$46,791 to S$42,339. Premiums for big cars (above 1,600cc) fell 6.4 per cent from S$57,390 to S$53,711 in Category B.
Premiums for the Open category, which can be used for all vehicles except motorcycles, dropped 5.5 per cent from S$57,501 to S$54,334.
NUMBERS AT A GLANCE:
Cat A (Cars up to 1600CC & 97KW): S$42,339 (down from S$46,791)
Cat B (Cars above 1600CC OR 97KW): S$53,711 (down from S$57,390)
Cat C (Goods vehicles and buses): S$42,000 (down from S$57,701)
Cat D (Motorcycles): S$6,552 (up from S$5,992)
Cat E (Open category): S$54,334 (down from S$57,501)
courtesy of TODAY
by KELLY NG
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