Not all dealers are afraid of higher premiums

[Ithunk]

Shell-shocked distributors await today's COE bidding

 

They expect rivals to bid strongly; not all dealers are afraid of higher premiums

 

By SAMUEL EE

 

(SINGAPORE) COE premiums should stay flat or rise slightly in today's final tender for the year, say some shell-shocked motor distributors, who expect a couple of their competitors to continue bidding strongly to fulfil back orders.

 

'Our showroom has been quiet since the last tender,' says one senior manager of a popular make of car with a sizeable showroom in the Leng Kee Road motor belt. 'We are not the only ones who were shocked by the COE increases.'

 

In the bidding exercise for certificates of entitlement (COEs) a fortnight ago, passenger car COE premiums skyrocketed to 13-year highs, with Category A - for cars under 1,600cc - jumping $8,604 to $47,604, while Category B - for cars above 1,600cc - soaring $14,612 to $62,502. Cat E - the open category - surged $15,010 to $64,900.

 

Dealers and buyers were stunned not only by the new heights reached but also by the sharpness with which they rose. Even immediately after a freak result, such as a $2 Cat A COE in November 2008, or the $200 Cat B COE in January 2009, premiums have not risen as significantly in recent memory.

 

'It was a perfect storm of stiff competition, shrinking quota and strong economy,' says the boss of a premium dealership. 'Everyone expects the COE quota to be cut from February, and the consumer wants to get a car now, either because he is afraid premiums will go higher or because he wants a new car for the Chinese New Year, or both. As for distributors, they have to do some window dressing before the year-end, so everyone just went for it.'

 

As a result of the sharp increases, consumers in general seem to have given car showrooms a wide berth over the past two weekends.

 

'I had to look twice at my neighbour's showroom the other day just to make sure it was open and not closed,' says a sales manager half in jest. 'The parking lot was almost empty.'

 

But he adds that fewer new orders collected over the past fortnight may not lead to lower premiums today.

 

'I know for a fact that one of the big Cat A players has not secured COEs for half of the orders they had two weeks ago,' he explains. 'And a couple of Cat B distributors will also need to pick up some too.'

 

The distributor of one European make disagrees that all showroom traffic had virtually disappeared. In fact, he welcomes the higher COE premiums because he says they make his slightly more high-end brand more attractive.

 

'We still had a few customers coming in soon after the last bid results,' he says. 'These are the serious buyers.'

 

He says having more upmarket customers has helped his sales, as has the foreign exchange rate.

 

'Those who are eyeing our cars can afford the COE price increases. And with the euro being more competitive than the yen, we have more room to manoeuvre financially,' he explains.

 

'So while most prospective buyers are holding back because of the high COE premiums, there have been some new orders for those makes at the upper end of the segment. Where premiums are headed today depends on whether these new orders are enough to push them higher than what they are currently,' he says.

 

He adds: 'And don't forget the taxi companies. Once they go in and start bidding, Cat A will not fall.'

 

Source

http://www.businesstimes.com.sg/sub/news/s...,418627,00.html

[Booboon]

frm the 6.30pm news, alot of smaller pi has hollanded.

[Forte3737]

those PIs selling CAT A cars can start to pack up already.

[Good-Carbuyer]

those PIs selling CAT A cars can start to pack up already.

I believe even some AD for lower value cars may also join them pack up sooner or later. Warranty no more?

[Ithunk]

frm the 6.30pm news, alot of smaller pi has hollanded.

 

The distributor of one European make disagrees that all showroom traffic had virtually disappeared. In fact, he welcomes the higher COE premiums because he says they make his slightly more high-end brand more attractive.

 

'We still had a few customers coming in soon after the last bid results,' he says. 'These are the serious buyers.'

 

He says having more upmarket customers has helped his sales, as has the foreign exchange rate.

 

'Those who are eyeing our cars can afford the COE price increases. And with the euro being more competitive than the yen, we have more room to manoeuvre financially,' he explains.

[Forte3737]

The distributor of one European make disagrees that all showroom traffic had virtually disappeared. In fact, he welcomes the higher COE premiums because he says they make his slightly more high-end brand more attractive.

 

'We still had a few customers coming in soon after the last bid results,' he says. 'These are the serious buyers.'

 

He says having more upmarket customers has helped his sales, as has the foreign exchange rate.

 

'Those who are eyeing our cars can afford the COE price increases. And with the euro being more competitive than the yen, we have more room to manoeuvre financially,' he explains.

 

artificial talk of a salesman

[Kangadrool]

Talk bird words.

[SimonTan]

Maybe he sells Lambo. He deserved to talk big as he is right in a way.

50 confirmed sales on a yet unseen and unbuilt model.

I mean this dealer can already see his fat fat 2011 year end bonus before 2011 even starts.

 

While the rest of the AD have to worry this and worry that.

 

[Ithunk]

Maybe he sells Lambo. He deserved to talk big as he is right in a way.

50 confirmed sales on a yet unseen and unbuilt model.

I mean this dealer can already see his fat fat 2011 year end bonus before 2011 even starts.

 

While the rest of the AD have to worry this and worry that.

 

all i know is that this dealer is confident

[Grunt72]

I booked my Nissan just before the sharp rise 2 weeks back. With guaranteed delivery and COE in Jan/Feb, I guess I dun have to worry too much. Likely I should get a higher COE value than expected. Lucky that I signed the night before the previous bid Wed before today. Although I still think the current prices of Jap cars are higher than normal even with COE increases. If the COE pricing is expected to be high for the next 2-3 years, holding my car till then may be OK I guess.

 

It will be 100,000K before we know it!