Speaker 1: It's a Singapore today top story with Lance and Daniel.
Speaker 1: It sure is. Uh, COE prices have gone up in
Speaker 1: most categories in the year's 5th bidding exercise. Uh, the
Speaker 1: only exception is in CAT A for smaller, more fuel efficient.
Speaker 1: Cars where premiums recorded a dip of $120 a 0.13%
Speaker 1: drop from the last bidding exercise series for Ca B
Speaker 1: cars rose about 3% to close at $113,000.
Speaker 1: Uh, let me just do a couple more, uh, goods,
Speaker 1: vehicles and buses, uh, premiums rose by about 2.5% to
Speaker 1: finish at $67,000 while COE prices for motorcycles recorded the
Speaker 1: biggest jump of more than $4000 or rather more than 4.5%
Speaker 1: closing at over $9000.
Speaker 2: Automotive industry veteran and consultants say is back on the
Speaker 2: show to talk to us. Um, hello. Hey guys, how's
Speaker 2: it going? Uh first point.
Speaker 2: That $120 drop in cat A, is that, is that
Speaker 2: like negligible is that even a drop? Well, to be honest,
Speaker 2: I think um the industry picked up quite a number
Speaker 2: of orders when COEs uh uh dropped in category A
Speaker 2: the last time around. Um, even though COEs rose uh
Speaker 2: back to about 92,000, there was still about 1000 over
Speaker 2: uh bits that had to be carried over.
Speaker 2: Now the industry also added uh probably about 1000 over
Speaker 2: new orders during that period of time. So it was
Speaker 2: pretty much uh treading water and, and so therefore, what
Speaker 2: you saw was really uh an industry finding its feet
Speaker 2: with this new equilibrium that was established by the increase
Speaker 2: in the the CUE supply and so therefore, because of
Speaker 2: the number of orders they had on hand, I think
Speaker 2: the the industry was treading water on category A.
Speaker 2: Now bear in mind, uh, that some of the big
Speaker 2: players like BOID, they, they are in pursuit of numbers
Speaker 2: and so perhaps those numbers were also reflective of what
Speaker 2: BOID was trying to do in the marketplace.
Speaker 1: Look, I'm just wondering, they keep saying that the more
Speaker 1: COE is being made available, we will see a drop
Speaker 1: in COE prices. We're not seeing it.
Speaker 2: Well, I mean, lots of experts have come on, on,
Speaker 2: on the air to say that, you know, when the
Speaker 2: supply goes up, uh, you know, the price will come down. I, I,
Speaker 2: I think you're seeing probably the start of the market
Speaker 2: finding its feet with this new era of increase in
Speaker 2: COE supply.
Speaker 2: And it will go through several cycles, like, for example,
Speaker 2: if you, if you were to look at where Category
Speaker 2: B is, uh, it rose by about 3400, uh, on
Speaker 2: the back of um of maybe about 1200 bits. Now,
Speaker 2: this is probably because
Speaker 2: Because some of the luxury brands are closing off their
Speaker 2: quarter and they need to pursue uh numbers. And, and
Speaker 2: so therefore, you see the numbers climbing, and that indicates
Speaker 2: to you that whilst the order that they took in
Speaker 2: for the month were very similar to the previous bid.
Speaker 2: These guys were basically bidding a little harder. So they're
Speaker 2: getting used to the increase in supply, and then the
Speaker 2: market is finding its feet again. So, uh, I've, I've
Speaker 2: been saying this for, for enough time now to, to
Speaker 2: sound like a broken record. Once the market starts to
Speaker 2: adjust to the increase in COE supply,
Speaker 2: It will trend upwards because of the state of competition
Speaker 2: amongst all the brands. Now we're pretty lucky this time
Speaker 2: around because apparently I didn't see any registrations for Tesla in,
Speaker 2: in January. I'm not sure whether that's just a blip
Speaker 2: or whether they are waiting for the supply of new
Speaker 2: vehicles to come through.
Speaker 2: But imagine if a player like Tesla were to come in,
Speaker 2: then maybe those numbers would be even more aggressive for
Speaker 2: Category B. So, we we're seeing a market now starting
Speaker 2: to get used to the rhythm, the cadence of this
Speaker 2: new increase in COE supply, and you would see that
Speaker 2: you will track upwards. So that you're quite we are
Speaker 2: quite accurate on, on that assessment.
Speaker 2: Uh, but it's like if you were, it's also interesting
Speaker 2: and noteworthy to talk about how it's being played out
Speaker 2: in the showrooms as well. I was in the showrooms
Speaker 2: in January and February and early March as well. And
Speaker 2: it's interesting because I, a lot of the staff were
Speaker 2: saying things like, Hey Ca A now buy cat A,
Speaker 2: do that instead, do that. That's the market adjusting itself, la,
Speaker 2: like you said, like the seller will respond to that
Speaker 2: idea in terms of the orders and maybe in terms
Speaker 2: of what they push out to the consumer as well. Right.
Speaker 2: So what you see is normally when you have this
Speaker 2: increase in COE uh supply and the numbers tumble for
Speaker 2: a while, the market then comes back into play and
Speaker 2: orders increase, but you would see that maybe dealerships, except
Speaker 2: probably those under pressure to meet quarterly targets, the rest
Speaker 2: of the dealerships when they pick up these orders are
Speaker 2: priced in at a lower COE value, they may not
Speaker 2: be in a hurry to actually secure the bids. They,
Speaker 2: they are probably hedging.
Speaker 2: That COA prices will come down a bit later down
Speaker 2: the road, and so they're really not in a hurry
Speaker 2: to actually bid up the COEs. So for the most
Speaker 2: competitive segment like Category A, you see a little bit
Speaker 2: of treading of water in that area, and it's largely
Speaker 2: due to the fact that uh that's a very price
Speaker 2: sensitive segment and the
Speaker 2: If you pick up orders at lower prices, chances of
Speaker 2: you bidding much higher for a COE in that segment
Speaker 2: cannot come into play unless you have a massive support
Speaker 2: from the manufacturers themselves.
Speaker 1: Queen, we know that about 20,000s will be released. Do
Speaker 1: we have any idea how many
Speaker 1: Of um those announced 20,000 additional COEs will come into
Speaker 1: play for this
Speaker 1: year.
Speaker 2: Lance, no idea.
Speaker 1: No one knows.
Speaker 2: No one knows Lance LPA I think is keeping this
Speaker 2: very close to their chest because I think if you
Speaker 2: were to let the industry work out how many pieces
Speaker 2: are available, you know, they will adjust.
Speaker 2: a little bit quicker to that cadence and then they'll
Speaker 2: start bidding more aggressively. So I think LTA is doing
Speaker 2: a smart decision by doing that, but because of that,
Speaker 2: I think then every bit then becomes probably as important
Speaker 2: as the previous bid, and so there will probably be
Speaker 2: additional pressure on the authorized dealers to actually go for
Speaker 2: every bit aggressively.
Speaker 2: Are you a believer in the concept of what goes
Speaker 2: up must come down?
Speaker 2: I've been a believer that whatever goes up must come
Speaker 2: down for COE for many things except COE, yeah, but, but, OK,
Speaker 2: I mean, we we we zoom out, we take a
Speaker 2: three year view.
Speaker 2: This thing. If, if COEs really increased to about maybe 60,000,
Speaker 2: 70,000 pieces a year, you will see those numbers come down.
Speaker 2: Will they come down to the previous levels of maybe
Speaker 2: 70,000 or 80,000.
Speaker 2: I doubt it because with every 10 year cycle, the
Speaker 2: market finds a new threshold, and with every 10-year cycle,
Speaker 2: new players come in to dominate the market. Uh, my
Speaker 2: contention has been that the national sales companies established in
Speaker 2: Singapore are keeping prices high because of the state of
Speaker 2: competition for C. Um, previous to that, a couple of
Speaker 2: years ago,
Speaker 2: To be private hire companies. Uh, now they've backed off
Speaker 2: because the demand for cars has fallen a bit, but
Speaker 2: there will always be a new player in town to
Speaker 2: actually keep those prices up. So, you know, once, once
Speaker 2: I believe what goes up will come down, with COEs,
Speaker 2: I tend to not hold my breath for that.
Speaker 1: OK. Now, your,
Speaker 1: your thoughts, Queen Eng, on the private hire cars for
Speaker 1: 3 years, uh, before selling to individuals, a good thing
Speaker 1: to stop premature conversions?
Speaker 2: Yes, absolutely. I think this off-ramp was something that was
Speaker 2: really um uh keeping uh uh the state of um
Speaker 2: uh demand for, for private hire vehicles in a flux because, um,
Speaker 2: once you have them aggressively getting COEs, um, the, the
Speaker 2: customers on the ground were probably not really seeing it
Speaker 2: translate to, uh, probably lower prices and more convenient access
Speaker 2: to private hire vehicles when they want to.
Speaker 2: So I, I think, you know, this is a really
Speaker 2: good move, and it stems from keeping point to point
Speaker 2: transport at, at a, at a certain level so that
Speaker 2: consumers are satisfied in their, in their needs because when
Speaker 2: COE prices are so high, point to point, transport is
Speaker 2: really an issue that must be tackled, and I think
Speaker 2: this was probably a long awaited decision by the LTA
Speaker 2: to actually cut off this loophole that was enjoyed by
Speaker 2: A lot of private hire companies who are using the
Speaker 2: loopholes really basically not to meet the demands of consumers
Speaker 2: for point to point transportation, but more to meet their own, uh,
Speaker 2: you know, profit targets and commercial reasons. Yeah. We've got
Speaker 2: a question coming in from one of our listeners, and
Speaker 2: it's David. David, thanks for sending a message across. You ask,
Speaker 2: how do you think the bank's playing a role in
Speaker 2: the finance and equity market that allow the readings to
Speaker 2: continue to be funded and therefore, even supply still find
Speaker 2: the support level?
Speaker 2: Um, I mean, look, um, financing in the car industry
Speaker 2: is a, a fairly well regulated, uh, instrument. um, you,
Speaker 2: you need a certain deposit if you are going to
Speaker 2: the market to buy the car. I think with private
Speaker 2: hire companies being established, a lot of people circumnavigated the
Speaker 2: requirement for you to have cash on hand.
Speaker 2: To buy a new car by basically going into the
Speaker 2: private hire system to actually lease a car, thereby not
Speaker 2: having to come up with a deposit. So, um, you know,
Speaker 2: I think whenever you, you, you plug a hole, something
Speaker 2: else opens up in the car industry, because the car
Speaker 2: industry is very quick to adapt to uh gaps in
Speaker 2: legislation or policies, and they will then swarm into that
Speaker 2: area to actually
Speaker 2: Make as much money as they possibly can. This is,
Speaker 2: this has been the car industry for the longest time,
Speaker 2: and I've been a practitioner of that as well. So
Speaker 2: I think it's almost impossible for, for policymakers to plug
Speaker 2: every single hole that they see coming from the system,
Speaker 2: but so long as the market is able to have
Speaker 2: a certain policy moving forward. In other words, if private
Speaker 2: hire vehicles are actually meant to be
Speaker 2: On the road and and not being actually used as
Speaker 2: another commercial enterprise, then certainly that would help ease some
Speaker 2: of the situation we're seeing on the ground.
Speaker 1: You know,
Speaker 1: uh, it's just been reported as well, probably an hour ago,
Speaker 1: that there will not be a separate COE category for
Speaker 1: private hire cars. OK, so that's out there now. It's
Speaker 1: been talked about in parliament and that decision has been made.
Speaker 1: Queen advice for people whose cars are due to expire.
Speaker 1: Mine is due to expire in November 2026. And, and,
Speaker 1: and yeah, but I'm just wondering as well, you know,
Speaker 1: what sort of advice are you people will definitely be
Speaker 1: seeking your advice, right? You know, whether it's a and
Speaker 1: it's in fairly good nick. Do you reckon?
Speaker 1: People who are thinking about, hmm, you know, should I
Speaker 1: just get my car scrapped or should I hang on
Speaker 1: and go for another 10 years or 5 years? What
Speaker 1: sort of advice do you normally give them?
Speaker 2: Well, I think, um, a lot of people are really now, uh,
Speaker 2: you know, caught between the devil and the deep blue
Speaker 2: sea since 2025 was supposed to be a big deregistration. Yeah,
Speaker 2: 2025 was promising to be a year where COE prices would,
Speaker 2: would come down based on historical 10 year trends, right?
Speaker 2: I don't see it coming now because now the government
Speaker 2: is basically capping how much COE is coming our way.
Speaker 2: And I think that's wise because I think they need
Speaker 2: to maintain the revenue streams that come from COEs, but
Speaker 2: it's not so good for us as consumers because it
Speaker 2: means that COEs will probably remain at this level. So
Speaker 2: I get a new car or not.
Speaker 2: I, I think, I think if you are ready to
Speaker 2: jump into another, maybe a petrol car, um, that decision
Speaker 2: is probably a little easier than if you are to
Speaker 2: jump into an electric vehicle, let's say, because a lot
Speaker 2: of people are still undecided about where, where to go
Speaker 2: with this EV trend.
Speaker 2: And and I think, you know, if you, if you
Speaker 2: look at where the market is heading, a lot of
Speaker 2: Singaporeans have already voted with their wallets to say that, no, no,
Speaker 2: I'm not waiting for it. The, the subsidy, I mean,
Speaker 2: the rebates are good. I'm jumping into the EV space.
Speaker 2: BYD was the top seller last month, right? I believe.
Speaker 2: They were indeed and and talk in the market is
Speaker 2: that BYD is really.
Speaker 2: Keeping the the the pedal to the metal. They are
Speaker 2: forcing a lot of registrations into the marketplace as well.
Speaker 2: So I, I don't see them letting up, and I
Speaker 2: think some of the offerings that they're having is too
Speaker 2: good to be true. So if you are really undecided
Speaker 2: about jumping in the EV space or not, chances are
Speaker 2: you would probably still sit on the fence and win
Speaker 2: until the very last minute and my
Speaker 2: My thinking is that a lot of these people will
Speaker 2: swing towards the tried and tested internal combustion engine cars.
Speaker 2: That's my thinking. But a lot of the other guys
Speaker 2: who are probably saying, well, you know, COE is already
Speaker 2: at an all-time high. If I were to jump into
Speaker 2: another petrol car, I'm probably paying about 100,000 more than
Speaker 2: I did 10 years ago. These people will say, forget
Speaker 2: about it. Let's look for a new toy.
Speaker 2: And then the new toy would be the EV car
Speaker 2: because you can actually step out of your existing maybe
Speaker 2: 6 or 7 year car, jump into a China made
Speaker 2: EV car and nobody would say that you're downgrading. But
Speaker 2: if you jump out of a 6 or 7 year
Speaker 2: old Japanese car and you jump into an EV car
Speaker 2: made say by by another existing brand, then
Speaker 2: But everyone would then say that, oh man, you're downgrading.
Speaker 2: That's a good point. I know a lot of people
Speaker 2: that sold their old Mercedes, sold the old BMW, and oh,
Speaker 2: I got the new seal, you know, that kind of thing.
Speaker 2: It's a new toy because it's, it's a techie gadget
Speaker 2: kind of thing. It's a techie gadget and that's been
Speaker 2: firing up some of the demand for EVs at this
Speaker 2: moment because nobody wants to step out of their cars
Speaker 2: and be seen to be downgrading.
Speaker 2: So I think that's firing up a little bit of
Speaker 2: the demand for the EV cars, um, but I would
Speaker 2: say honestly, Lance, I mean, you and I are friends,
Speaker 2: if you are in the market for a car in
Speaker 2: the next few months, it really doesn't matter whether you
Speaker 2: buy now or in about 6 months or so, the
Speaker 2: prices may trend southwards a little bit,
Speaker 1: right? Yeah,
Speaker 2: but not to the point that, you know, it's going
Speaker 2: to make you go, whoa, man, I'm glad I waited,
Speaker 2: you know.
Speaker 2: Thank you for the voice of reason, automotive industry veteran
Speaker 2: and consultant Queening joining us as we discuss the new
Speaker 2: cigar prices that were just released today at Singapore today.