COE Prediction - May 2009 1st Bidding Exercise

The oversubscribed rate for the April 2nd bidding exercise was between 32% to 38%, lower than the previous 45%. The local paper has also interviewed an industry expert who commented that the COE quota premium will be supported in the next few rounds from accumulated orders over the last few weeks before the 2009/2010 quota reduction. You may have also read in the local forums about the long waiting time for some popular makes as the authorized distributors do not have stock on hand. In those cases, the ADs may opt to delay the bidding since some sales agreements allow for up to six non-guaranteed bids.

I reckon that the COE quota premium will stay in the $6K to $8K band.

Prediction on April 28:
Category A: $7,000-8,000
Category B: $7,000-8,000

Verdict on May 6:
Category A: $8,489
Category B: $7,552

Accredited Dealers

http://www.channelnewsasia.com/stories/singaporelocalnews/view/425142/1/.html:
49 used car traders and parallel importers are pioneer members of CaseTrust-SVTA, a new accreditation scheme set up by the Consumers Association of Singapore (CASE) and the Singapore Vehicle Traders Association (SVTA). I felt that this is a healthy move to "regulate" the parallel importers since they have to adhere to the dispute resolution process to protect consumers.

Car is a big ticket item and I would be very cautious about buying from the Parallel Importers since they do not have any contractual obligation with the manufacturers and can switch to buying from an alternate source when relationship goes sour. I am also quite shocked to read many threads in the local forums about the complication of the deals resulting from the freak result of the $2 Category A COE quota premium last November. Many buyers apparently did not even get proper sales documentation from the dealers.

Some dealers started small and grow into a reputable size over time, it is indeed difficult for a new firm to fork out additional capital to join the scheme at its inception. However, I think it is going to be a mandatory operating cost to establish trustworthiness to the consumers. Will the scheme assure the elimination of conflict? No, but the consumers is guaranteed protection when buying from accredited dealers.

I had bought my current ride from the authorized distributor. Will I consider buying my next ride from an accredited PI? Very likely once the scheme is able to demonstrate its effectiveness and I am able to save a bundle. I hope the authorized distributors will modify their pricing strategy since the consumers will then have another "safe" option.

COE Prediction - April 2009 2nd Bidding Exercise

The April 1st Bidding Exercise outcome was within my expectation. I do have two interesting observations:

1. 54 Category B COEs were not awarded due to the high volume of unsuccessful $7,500 bids. The dealers could not increase their bids in time before the bidding exercise closed at 4pm. The dealers will probably put in a higher bids in the next exercise since their customers must be frustrated to have their new car delivery delayed for another fortnight.

2. Both categories were over subscribed by 45%. I felt that the demand is still weak considering the three weeks' elapse time before the bidding exercise. An estimated 5-10% of the bids are low opportunistic ones so the number of genuine buyers is low in my opinion.

I noticed that most authorized dealers' car advertisements over the long weekend do not have prices shown. I think many of them are split as to where the COE quota premium is heading. My guess ... flat or slight softening in the next bidding exercise.

Prediction on April 13:
Category A: $6,000-7,000
Category B: $6,000-7,000

Verdict on April 22:
Category A: $7,589
Category B: $7,490