SINGAPORE – In a surprising turn of events, the latest bidding results for Certificates of Entitlement (COEs) revealed a notable increase in prices across most categories, except for commercial vehicles. The final bidding exercise for 2024, which concluded on December 18, saw significant shifts in the market, with the premium for Category B COEs—the category designated for larger, more powerful cars and electric vehicles (EVs)—climbing to a staggering $109,000. This marks a sharp 5.8% rise from the previous figure of $103,010 recorded on December 4.

Meanwhile, Category A COEs, used for registering smaller, less powerful vehicles and EVs, also saw an uptick, priced at $96,000—up 2.1% from $94,000 in the last exercise. Notably, the motorcycle segment (Category D) experienced the largest increase, with premiums soaring by 6.4% to $8,381 from $7,878. Additionally, the Open category (Category E), which can be utilized for any vehicle type barring motorcycles, rose 4.8% to $108,992, compared to $104,001 two weeks prior.

In contrast, the premium for Category C COEs for commercial vehicles bucked the trend, falling 0.6% to $69,890, down from $70,289 in the last tender. This anomaly raises questions amid a generally bullish market.

A COE is a crucial requirement for vehicle registration in Singapore, and the ongoing fluctuations in their prices reflect a dynamic market influenced by demand, economic conditions, and seasonal factors. Ms. Adele Lee, assistant general manager overseeing the Swedish EV brand Polestar at Wearnes Automotive, remarked on the unusual December trends. Typically considered a quieter month for dealers, many companies have opted to run promotions to boost sales, contributing to the hike in COE premiums.

Lee noted her surprise at the higher-than-expected $5,990 increase in Category B prices and reflected on the unpredictable future trajectories of COEs as 2025 approaches. "The upcoming COE quota announcement in February will play a crucial role in shaping the market," she emphasized.

The Land Transport Authority has indicated plans to inject up to 20,000 additional COEs starting February 2025, hinting at a responsiveness to evolving travel patterns. In her analysis, Lee pointed out the influx of new entries into the market, particularly among EV manufacturers, which has intensified competition and led to increased demand and, consequently, rising COE prices.

Mr. Ng Choon Wee, the commercial director of Hyundai distributor Komoco Motors, shared his astonishment regarding the increases in Categories A and B, especially during a holiday season when many consumers are typically traveling abroad. He also suggested that the persistent rises could stem from distributors striving to hit end-of-year sales targets.

Looking ahead, Ng expressed cautious optimism for the upcoming COE tender on January 8, 2025, predicting that prices might soften as buyers potentially hold out for better bargains at the highly anticipated Singapore Motorshow 2025, set to be held from January 9 to 12 at the Suntec Singapore Convention & Exhibition Centre.

As the automotive market continues to evolve, potential buyers and industry analysts alike keenly await the developments in COE prices and the broader implications for vehicle registration in Singapore.