I believe everyone was surprised by LTA's announcement after the last bidding exercise - contrary to widespread expectation that COE quota will be reduced for the next half year, LTA has kept Category A, B and E COEs' monthly supply constant while reducing only the Goods vehicles and Motorcycles by 22.5% and 8.2% respectively.
By the way, I have found a site myCarForum that uses a good charting tool to show the trend of COEs since mid 2002 - here are the links to Category A chart and Category B chart. COE quota premium for private vehicles (Category A & B) have stayed below the $20K mark in the last six months so it has resulted in a stable car refresh (i.e. motorists bought new cars to replace their aging ones). On the other hand, goods vehicles have experienced a special situation. Euro IV emission standards was implemented from October 2006, ahead of many other countries - praise LTA for being environmentally friendly. However, dealers were slow to bring in goods vehicle models that meet the Euro IV emission standards and the demand for Category C COE were depressed for many months. This resulted in a corresponding low Prevailing Quota Premium to renew COE for goods vehicles. Many owners of old goods vehicles took advantage and did so. The reduction of Category C COEs for the next half year should drive up the quota premium and hopefully drive old goods vehicles off the roads. LTA is wiser after this experience.
The rush to buy before the anticipated reduction of COE quota has came to null so I predict that the quota premium will further soften. Potential buyers have a longer horizon to time their purchase without the fear of reduced supply and dealers have not significantly lower their selling price after the recent run-up.
Prediction on September 25:Category A: $15,000-16,000
Category B: $16,000-17,000
Verdict on October 3:
Category A: $16,999
Category B: $17,102
No comments:
Post a Comment