It's a Singapore today top story with Lance and Daniel. It sure is. Uh, COE prices have gone up in most categories in the year's 5th bidding exercise. Uh, the only exception is in CAT A for smaller, more fuel efficient. Cars where premiums recorded a dip of $120 a 0.13% drop from the last bidding exercise series for Ca B cars rose about 3% to close at $113,000.
Uh, let me just do a couple more, uh, goods, vehicles and buses, uh, premiums rose by about 2.5% to finish at $67,000 while COE prices for motorcycles recorded the biggest jump of more than $4000 or rather more than 4.5% closing at over $9000.
Automotive industry veteran and consultants say is back on the show to talk to us. Um, hello. Hey guys, how's it going? Uh first point. That $120 drop in cat A, is that, is that like negligible is that even a drop? Well, to be honest, I think um the industry picked up quite a number of orders when COEs uh uh dropped in category A the last time around. Um, even though COEs rose uh back to about 92,000, there was still about 1000 over uh bits that had to be carried over.
Now the industry also added uh probably about 1000 over
new orders during that period of time. So it was pretty much uh treading water and, and so therefore, what you saw was really uh an industry finding its feet with this new equilibrium that was established by the increase in the the CUE supply and so therefore, because of the number of orders they had on hand, I think the the industry was treading water on category A. Now bear in mind, uh, that some of the big players like BOID, they, they are in pursuit of numbers
and so perhaps those numbers were also reflective of what BOID was trying to do in the marketplace.
Look, I'm just wondering, they keep saying that the more COE is being made available, we will see a drop in COE prices. We're not seeing it.
Well, I mean, lots of experts have come on, on, on the air to say that, you know, when the supply goes up, uh, you know, the price will come down. I, I, I think you're seeing probably the start of the market finding its feet with this new era of increase in COE supply. And it will go through several cycles, like, for example, if you, if you were to look at where Category B is, uh, it rose by about 3400, uh, on
the back of um of maybe about 1200 bits. Now, this is probably because Because some of the luxury brands are closing off their quarter and they need to pursue uh numbers. And, and so therefore, you see the numbers climbing, and that indicates to you that whilst the order that they took in for the month were very similar to the previous bid. These guys were basically bidding a little harder. So they're getting used to the increase in supply, and then the
market is finding its feet again. So, uh, I've, I've been saying this for, for enough time now to, to sound like a broken record. Once the market starts to adjust to the increase in COE supply, It will trend upwards because of the state of competition amongst all the brands. Now we're pretty lucky this time around because apparently I didn't see any registrations for Tesla in,
in January. I'm not sure whether that's just a blip or whether they are waiting for the supply of new vehicles to come through. But imagine if a player like Tesla were to come in, then maybe those numbers would be even more aggressive for Category B. So, we we're seeing a market now starting to get used to the rhythm, the cadence of this new increase in COE supply, and you would see that you will track upwards. So that you're quite we are quite accurate on, on that assessment.
Uh, but it's like if you were, it's also interesting and noteworthy to talk about how it's being played out in the showrooms as well. I was in the showrooms in January and February and early March as well. And it's interesting because I, a lot of the staff were saying things like, Hey Ca A now buy cat A, do that instead, do that. That's the market adjusting itself, la, like you said, like the seller will respond to that idea in terms of the orders and maybe in terms
of what they push out to the consumer as well. Right. So what you see is normally when you have this increase in COE uh supply and the numbers tumble for a while, the market then comes back into play and orders increase, but you would see that maybe dealerships, except probably those under pressure to meet quarterly targets, the rest of the dealerships when they pick up these orders are priced in at a lower COE value, they may not
be in a hurry to actually secure the bids. They, they are probably hedging. That COA prices will come down a bit later down the road, and so they're really not in a hurry
to actually bid up the COEs. So for the most competitive segment like Category A, you see a little bit of treading of water in that area, and it's largely due to the fact that uh that's a very price sensitive segment and the If you pick up orders at lower prices, chances of you bidding much higher for a COE in that segment cannot come into play unless you have a massive support from the manufacturers themselves.
Queen, we know that about 20,000s will be released. Do we have any idea how many Of um those announced 20,000 additional COEs will come into play for this year.
Lance, no idea.
No one knows.
No one knows Lance LPA I think is keeping this very close to their chest because I think if you were to let the industry work out how many pieces are available, you know, they will adjust. a little bit quicker to that cadence and then they'll
start bidding more aggressively. So I think LTA is doing a smart decision by doing that, but because of that, I think then every bit then becomes probably as important as the previous bid, and so there will probably be additional pressure on the authorized dealers to actually go for every bit aggressively. Are you a believer in the concept of what goes up must come down?
I've been a believer that whatever goes up must come down for COE for many things except COE, yeah, but, but, OK, I mean, we we we zoom out, we take a three year view. This thing. If, if COEs really increased to about maybe 60,000, 70,000 pieces a year, you will see those numbers come down. Will they come down to the previous levels of maybe 70,000 or 80,000. I doubt it because with every 10 year cycle, the market finds a new threshold, and with every 10-year cycle,
new players come in to dominate the market. Uh, my contention has been that the national sales companies established in Singapore are keeping prices high because of the state of competition for C. Um, previous to that, a couple of years ago, To be private hire companies. Uh, now they've backed off because the demand for cars has fallen a bit, but there will always be a new player in town to
actually keep those prices up. So, you know, once, once I believe what goes up will come down, with COEs, I tend to not hold my breath for that.
OK. Now, your, your thoughts, Queen Eng, on the private hire cars for 3 years, uh, before selling to individuals, a good thing to stop premature conversions?
Yes, absolutely. I think this off-ramp was something that was really um uh keeping uh uh the state of um uh demand for, for private hire vehicles in a flux because, um, once you have them aggressively getting COEs, um, the, the customers on the ground were probably not really seeing it translate to, uh, probably lower prices and more convenient access to private hire vehicles when they want to.
So I, I think, you know, this is a really good move, and it stems from keeping point to point transport at, at a, at a certain level so that consumers are satisfied in their, in their needs because when COE prices are so high, point to point, transport is really an issue that must be tackled, and I think this was probably a long awaited decision by the LTA to actually cut off this loophole that was enjoyed by A lot of private hire companies who are using the
loopholes really basically not to meet the demands of consumers for point to point transportation, but more to meet their own, uh, you know, profit targets and commercial reasons. Yeah. We've got a question coming in from one of our listeners, and it's David. David, thanks for sending a message across. You ask, how do you think the bank's playing a role in the finance and equity market that allow the readings to continue to be funded and therefore, even supply still find the support level?
Um, I mean, look, um, financing in the car industry is a, a fairly well regulated, uh, instrument. um, you, you need a certain deposit if you are going to the market to buy the car. I think with private hire companies being established, a lot of people circumnavigated the requirement for you to have cash on hand. To buy a new car by basically going into the private hire system to actually lease a car, thereby not
having to come up with a deposit. So, um, you know, I think whenever you, you, you plug a hole, something else opens up in the car industry, because the car industry is very quick to adapt to uh gaps in legislation or policies, and they will then swarm into that area to actually Make as much money as they possibly can. This is, this has been the car industry for the longest time,
and I've been a practitioner of that as well. So I think it's almost impossible for, for policymakers to plug every single hole that they see coming from the system, but so long as the market is able to have a certain policy moving forward. In other words, if private hire vehicles are actually meant to be On the road and and not being actually used as another commercial enterprise, then certainly that would help ease some of the situation we're seeing on the ground.
You know, uh, it's just been reported as well, probably an hour ago, that there will not be a separate COE category for private hire cars. OK, so that's out there now. It's been talked about in parliament and that decision has been made. Queen advice for people whose cars are due to expire. Mine is due to expire in November 2026. And, and, and yeah, but I'm just wondering as well, you know, what sort of advice are you people will definitely be
seeking your advice, right? You know, whether it's a and it's in fairly good nick. Do you reckon? People who are thinking about, hmm, you know, should I just get my car scrapped or should I hang on and go for another 10 years or 5 years? What sort of advice do you normally give them?
Well, I think, um, a lot of people are really now, uh, you know, caught between the devil and the deep blue sea since 2025 was supposed to be a big deregistration. Yeah, 2025 was promising to be a year where COE prices would, would come down based on historical 10 year trends, right? I don't see it coming now because now the government is basically capping how much COE is coming our way.
And I think that's wise because I think they need to maintain the revenue streams that come from COEs, but it's not so good for us as consumers because it means that COEs will probably remain at this level. So I get a new car or not.
I, I think, I think if you are ready to jump into another, maybe a petrol car, um, that decision is probably a little easier than if you are to jump into an electric vehicle, let's say, because a lot of people are still undecided about where, where to go with this EV trend. And and I think, you know, if you, if you look at where the market is heading, a lot of Singaporeans have already voted with their wallets to say that, no, no, I'm not waiting for it. The, the subsidy, I mean,
the rebates are good. I'm jumping into the EV space. BYD was the top seller last month, right? I believe. They were indeed and and talk in the market is that BYD is really. Keeping the the the pedal to the metal. They are forcing a lot of registrations into the marketplace as well. So I, I don't see them letting up, and I think some of the offerings that they're having is too
good to be true. So if you are really undecided about jumping in the EV space or not, chances are you would probably still sit on the fence and win until the very last minute and my My thinking is that a lot of these people will swing towards the tried and tested internal combustion engine cars. That's my thinking. But a lot of the other guys who are probably saying, well, you know, COE is already
at an all-time high. If I were to jump into another petrol car, I'm probably paying about 100,000 more than I did 10 years ago. These people will say, forget about it. Let's look for a new toy. And then the new toy would be the EV car because you can actually step out of your existing maybe 6 or 7 year car, jump into a China made
EV car and nobody would say that you're downgrading. But if you jump out of a 6 or 7 year old Japanese car and you jump into an EV car made say by by another existing brand, then But everyone would then say that, oh man, you're downgrading. That's a good point. I know a lot of people that sold their old Mercedes, sold the old BMW, and oh, I got the new seal, you know, that kind of thing. It's a new toy because it's, it's a techie gadget
kind of thing. It's a techie gadget and that's been firing up some of the demand for EVs at this moment because nobody wants to step out of their cars and be seen to be downgrading. So I think that's firing up a little bit of the demand for the EV cars, um, but I would say honestly, Lance, I mean, you and I are friends, if you are in the market for a car in the next few months, it really doesn't matter whether you buy now or in about 6 months or so, the prices may trend southwards a little bit,
right? Yeah,
but not to the point that, you know, it's going to make you go, whoa, man, I'm glad I waited, you know. Thank you for the voice of reason, automotive industry veteran and consultant Queening joining us as we discuss the new cigar prices that were just released today at Singapore today.