New year, new trend?

The result from the first COE bidding exercise for 2009 was released after bidding closed yesterday at 4.00pm. And surprise, surprise – the COE prices fell for the popular Category A and Category E (Open Category), while Category B went up.

LTA put up 4,389 COEs up for this round of bidding, allocating 1,839 for Cat A, 1,100 for Cat B and 767 for Cat E (the rest reserved for Cat C and Cat D). At closing time, Cat A saw 2,541 bids, Cat B saw 1,332 bids and Cat E saw 1,118 bids made. However, only 1,784 were successful for Cat A and 763 for Cat E – the rest of the unsuccessful ones probably due to the low bids made.

Surprisingly, all 1,100 were successfully snapped up for Cat B with the surplus 232 bids having to try again at the next round.

With Cat A now standing at $5,001, Cat B at $3,089 and Cat E at $5,701, the first bid for the new year saw a drop of $1,199 for Cat A and $808 for Cat E, while Cat B saw a $433 increase - all these figures were derived after a comparison with December 2008’s last round of bidding. A quick check with several authorised distributors revealed that they have also slashed prices by up to $1,000 for their Cat A models, while keeping the prices of their bigger models unchanged.

Civil servant Gillian Wee, who made a booking for the new Honda Jazz 1.5 last month was not surprised with the latest results. In fact, she felt disappointed. “I noticed a drop in car prices late last year, and with the recession now, I predicted a drop in COE prices”, she said. “While my prediction came true, the amount wasn’t what I expected – I was hoping a drop of at least $2,000.”

James Toh, a sales executive with a Japanese car brand here thinks the result has given him a brief insight of the COE pattern for the first half of this year. “Looking at it, I believe the COE trend will most probably go downwards for the first half of the year – but not much, probably only by a few hundred dollars each round”, he said. “But I can only predict, and won’t be surprised if the prices increase too – again, only by a few hundred each time.”

And he could be right. With times predicted to be tougher as we go into 2009, buyers are more wary at buying a car. Add to the fact that the LTA will cap the number of COEs available for each bidding exercises, these two major factors will ultimately affect the prices of COEs. At the same time, punters can only hope for the prices of COE to remain unchanged or better still, decrease.

With Singaporeans generally practising a “wait and see” attitude, a significant increase in COE prices will easily affect the buying trend - potential buyers will be turned off, and ultimately, affect car sales figures. When asked to comment on buyer’s buying trend for 2009, Volkswagen Group Singapore’s MD, Dr. Olaf Duebel says, “We expect buyers to make more informed and careful decisions in this period of economic uncertainty. Therefore they will look for value in their purchases and will take time to evaluate the offers with showroom visits and test drives.”

The result of yesterday’s COE bidding also revealed one fact. Looking at the sheer number of bids received in Cat A, B and E, it shows that the showrooms are still filled and sales contracts are still being signed on. Well it seems despite the gloom, car buying attitude remains unchanged for now.

Credits: Story by Azfar Hashim, pictures from oneshift.com archive