The oversubscribed rate for the September 2nd bidding exercise was 11% for Category A, 21% for Category B and 76% for Category E (Open) COEs. The demand for small cars was weak but with the LTA announcement on the mid-year review of COE Quota. Category A, B & E quota will be reduced by 17.8%, 9.8% & 18.8% respectively.
What is the impact of the reduction in quota? I am of the opinion that the supply squeeze will support the uptrend running up to the Chinese New Year. I predict that the quota premium for Category B and E will breach the $20K mark in the next bidding exercise. Category A quota premium should rebound to the previous level since most dealers are keeping the same price level with the anticipated uptrend.
Prediction on September 30:
Category A: $18,000-19,000
Category B: $20,000-21,000
Verdict on October 7:
Category A: $16,201
Category B: $18,109
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