The second Certificate of Entitlement (COE) bidding tender for November 2020 saw an increase in all categories except Category C. On 18 November 2020, Category C saw a further decrease of 3.78%, while Category B and E passed the $40,000 mark once again.
Category A closed at $37,690, which increased by $1,700 from the first tender in November 2020 with 1,361 bids received.
Category B closed at $41,101, the highest across all categories. Quota premium increased by $2,101 from the previous round with 1,559 bids received.
Category C closed at $30,334, having a continued decrease of $1,168 from the previous round with 597 bids received.
Lastly, Category E closed at $41,503, with an increase of $2,002 from the previous round with 803 bids received.
While demand remains stable, unsuccessful bids from last round were likely carried forward, resulting in a spike in COE prices. Overall number of bids have seen significant decrease since July 2020, but we can expect continued slight increases as the number of quotas available start to increase. Trends have shown that the number of bids received increased in tandem, albeit minute.
As prices start to push past the $30,000 and $40,000 mark, demand is likely to wane in hopes of getting premiums back below acceptable prices. However, the market should be wary of buyers counting on decreased demand to buy more and consequently, inflate COE prices.
FUTURE COE PREDICTIONS
Individuals from the industry have provided their views on the latest COE bidding prices for November 2020.
“Firstly, 11.11 sales have likely triggered some sales,” said Mr Aaron Kek, Sales Manager of Leco Auto.
With the ongoing 11.11 sales, dealers have also followed the lead to entice consumers with promotions and discounts. Consumers are in a spending mood, and it may have seeped into the automobile industry.
Mr Kek also suggested that year-end report cards also play a part in the COE price increase. Distributors are competing for registration quotas in hopes of bumping up their sales report for 2020. As such, they are going neck-to-neck in the final rounds of COE bidding and pushing COE prices up.
Mr David Peh, Manager of Dpex Motor, also believes that promotions account for increase in COE prices.
“Car agents are pushing out existing stock before the year ends, so there are many ongoing clearance sales for Cat A, B, and E.”
“For Cat C, demand has tapered due to the previously urgent demand for commercial vehicles during Phase 2 cooling down,” Mr Peh continued.
“I guess Cat A, B and C will move upwards till Chinese New Year.”
Given the end of the spending craze, we may expect consumers to practice prudence in the final rounds of COE bidding coming December 2020. Nevertheless, with end-of-year sales reports looming, it is likely that demands will be driven by those within the industry. Many are hoping that COE prices will fall below $30,000 and $40,000 once again.
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