Car buyers will have slightly fewer
certificates of entitlement (COE) to vie for in the next three
months as the first "zero growth" quota kicks in.
The Land Transport Authority announced yesterday that
the overall monthly COE supply will shrink by 1.1 per cent to 8,544
for the February-April quota.
The COE supply for bigger cars (above 1,600cc or
130bhp), commercial vehicles and motorcycles will all increase
marginally.
The Open category, which can be used for any vehicle
type except motorcycles, will see a 10.4 per cent growth to 1,132
COEs a month.
But the total number of certificates is pulled down by
a 7.3 per cent shrinkage in COEs for smaller cars (up to 1,600cc
and 130bhp).
Buyers and sellers of these bread-and-butter cars will
have 3,115 COEs a month, down from 3,360 in the November-January
period.
Together, the big- and small-car categories will have
5,894 COEs, or 3.5 per cent fewer than now.
But if Open COEs are included, car buyers on the whole
will see a 1.5 per cent dip in supply to 7,026 from next month.
Open COEs have usually been secured mostly by big-car
buyers and sellers.
This is the first quota affected by the new zero
vehicle allowable growth rate.
The growth cap - from an allowable growth of 0.25 per
cent a year - applies to all except commercial vehicles.
The growth rate for commercial vehicles will remain
unchanged at 0.25 per cent until the first quarter of 2021 to give
businesses more time to improve the efficiency of their logistics
operations and reduce the number of commercial vehicles they
require.
From next month, the monthly average quota for
commercial vehicles will inch upwards by 0.8 per cent to 493.
With zero growth in place, car COE supply is now
determined solely by the number of cars scrapped.
Despite the sizeable shrinkage in the small-car COE
quota, dealers do not expect premiums to rise significantly.
This is because sellers generally have thinner margins
now that they have to absorb part of the cost increase brought on
by a new emission tax.
Under the Vehicular Emissions Scheme, many cars which
previously had tax breaks are now in the neutral band.
And those previously in neutral face tax
surcharges.
TNP