COE Bidding – Feb 2025

[Mkl22]

  On 2/15/2025 at 8:50 AM, Wildfaye29 said:

https://www.straitstimes.com/opinion/industry-veterans-verdict-rising-supply-likely-to-push-down-coe-prices

Industry veteran’s verdict: Rising supply likely to push down COE prices

Research done by the writer shows clear link between supply and prices.

Victor Kwan UPDATED Feb 15, 2025, 02:21 PM

Singapore and Singaporeans have had a complex relationship with the certificate of entitlement (COE) for more than three decades. Everyone has a view on it. Here are mine – having spent 24 years in the automotive industry. In a nutshell, I believe the drop in COE prices is likely to continue, even though others may tell you the opposite. Let me explain why.

I remember that tense afternoon meeting some time in 2012. I was then the managing director of a Singapore-based automotive dealer group and was caught in the middle of a gut-wrenching professional roller-coaster ride akin to those at Disneyland. Except it was worse. My ride lasted years and not mere minutes. You see, COE supply was at a record low at that time. For an automotive dealer, this meant a minuscule market size, high COE prices, plummeting sales volume and even retrenchment. To make matters worse, things had been completely opposite just a few years prior – supply at a record high, the prices low and businesses expanding.

Amid this unhappy thrill ride, I was invited to a meeting with the Land Transport Authority. Given the unfavourable situation at that time, they were keen to hear the grouses from the ground. And grouse I did. These peaks and troughs in COE supply are unhealthy for the country’s transport system, not just commercially but socially as well, I said.

I proposed that LTA policymakers take the forecasted abundant COE supply from future years and insert some of it into the here and now. Not only would this solve our immediate supply pain, it would also prevent future roller-coaster rides. In other words, my proposal would allow all of us to live happily ever after (at least with car ownership) in one fell swoop. As history shows, my suggestion was not taken and our COE supply went through another peak about four years later and trough afterwards.

Fast forward a decade and you can imagine my smugness when LTA announced their “cut and fill” policy in May 2023. For the uninitiated, the mechanisms of cut and fill are broadly similar to what I had proposed in that meeting – that is, bringing forward future COEs to increase current availability and smooth future supply. As the proverbial saying goes, “better late than never” and kudos to LTA for that. A year later, they made another announcement that an additional 20,000 COEs, on top of those from cut and fill, will be gradually released.

Simple supply and demand

Since these two announcements, 18,000 COEs for cars and 3,000 for motorcycles have been brought forward. With this increase in supply, COE prices have also fallen an average of 25 per cent across the board, for cars, motorcycles and commercial vehicles (see chart).

To prevent speculation, few details have been revealed on when the additional COEs will be released. But one key message has been made official – the authorities will be using these new policies to ensure a consistent increase in supply of passenger and commercial vehicle COEs until the peak year of 2026.

In my current role as a faculty with the Singapore University of Social Sciences, I recently worked with a colleague to utilise an XAI-Enabled Deep Learning Approach and 20 years of public data on COE bidding to analyse past COE price fluctuations. Unlike other auctions that display evidence of irrational consumer behaviour, we conclude that COE prices closely follow the classical law of supply and demand. This means that when supply increases, prices will almost certainly follow a downward trend. In other words, the 25 per cent drop in prices since 2023 is likely to continue.

Don’t listen to fearmongers

However, the COE price is one of Singapore’s favourite coffee shop conversations – often spiced up with a generous dose of conspiracy theories – and there are more armchair analysts with “expert” views than at a Premier League football match. I have sat through a lifetime worth of these coffee shop talks and feel that many of these analysts with contrasting views are frequently fearmongers, Mr Always-Right or procyclical thinkers with little statistical basis.

In a way, I was a target of such irrational COE fearmongering when I was a young executive overseeing sales for a Korean car brand. When COE prices were high, a number of panic prophets warned me that nobody would buy Korean cars as prices were too high. And when COE prices were low, the same doomsayers cautioned that nobody would buy Korean cars as competitors were now able to price themselves competitively. If I had listened to them, I would have slipped into a depression, left the business and gone into selling Matchbox cars that need no COE. Thankfully, I did not and that Korean brand has since grown from strength to strength.

There is another funny story of a colleague who, before every COE bidding exercise, would call half his friends and proclaim that prices would drop. He then called the remaining half to predict that prices would increase. Regardless of the final price, he would always be revered for his forecasting prowess, depending on which half he called afterwards.

My advice to all hoping to own a new car? Supply will continue to increase and the drop in COE prices is likely to continue – so listen less to the fearmongers and trust the science.

I am putting money where my mouth (or keyboard) is. I am replacing my ageing car and have requested a relatively unusual arrangement with the dealer – bid low as I believe there is a chance of catching it at a good price. Supply is increasing and I am happy to wait. I raised a few sceptical eyebrows when relating this approach to some of my friends. Needless to say, I cannot wait for the day when I successfully secure my COE and have that same smug look when telling them, “I told you so”. I just need to make sure that when that time comes, I am talking to the correct half of my friends.

Dr Victor Kwan spent 24 years in the automotive industry and is currently a faculty at the Singapore University of Social Sciences. This article is written from his vantage point as both a reformed armchair analyst and a good scientist.

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I don’t have Permanent Head Damage, also can see that with rising quota supply the prices will moderate la. 废话！

the key is moderate by how much. 

[13177]

  On 2/15/2025 at 8:54 AM, Mkl22 said:

I don’t have Permanent Head Damage, also can see that with rising quota supply the prices will moderate la. 废话！

the key is moderate by how much. 

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No say drop to how much? Lol.

[Mkl22]

I also want to be smug and say it here that come 2031-2034. The quota will be bad once again. As long as the same formula for deriving the quota is the same. 

Edited February 15 by Mkl22

[Benarsenal]

I don't think it will drop by a lot. Govt recognises that sub-$50k COE is not sustainable.

Quota may be more but Govt will likely still make it relatively costly, in line with their vision. At best will hover around $80-90k mark.

[Gnahp]

supply increase, demand also will increase

LPPL

he talks until like the demand is fixed, cast in the stone

 

 

[Ginyu]

  On 2/15/2025 at 6:55 PM, Benarsenal said:

I don't think it will drop by a lot. Govt recognises that sub-$50k COE is not sustainable.

Quota may be more but Govt will likely still make it relatively costly, in line with their vision. At best will hover around $80-90k mark.

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As long this kind of payment flexibility below is around, where dealers bid higher and consumers are willing to struggle to own it. COE continue to remain high. Dare them to put min 50% down and 5 year max loan and see if the demand is still there🤣

 

 

 

 

 

 

Edited February 16 by Ginyu

[Volvobrick]

  On 2/15/2025 at 7:19 PM, Gnahp said:

supply increase, demand also will increase

LPPL

he talks until like the demand is fixed, cast in the stone

 

 

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KKK, KKS. 

One car scrapped means one additional new car buyer. They don't see that de. 

 

[Invigorated]

  On 2/16/2025 at 1:57 AM, Volvobrick said:

KKK, KKS. 

One car scrapped means one additional new car buyer. They don't see that de. 

 

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You are right but each new car buyer may:

1) not bid for a new COE as may buy resale as quantum is lower,

2) stop driving or maybe rent,

3) bid for a different Cat COE..

4) of cos, buy new if cost isn't an issue..

5) drive a phv rental car for some retirees.. 

of cos this list isnt exhaustive but my point is that it doesnt necessarily translate to a new car buyer.

 

[Invigorated]

  On 2/15/2025 at 7:19 PM, Gnahp said:

supply increase, demand also will increase

LPPL

he talks until like the demand is fixed, cast in the stone

 

 

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supply increases in the past have almost always lead to fall in prices.. it's just economics as the prices reach a new equilibrium. 

at least that's what history tells us. That's why the government is trying to control prices with the cut and fill approach and the 20k gradual injection.

Prices have already come some way down from the peak 150k for cat B, though there is still room to go down more with more incoming demand.

Those who are aiming for a COE crash based on the 10 year cycle may not see the intended drops as the cut and fill also means they can fill and cut. 

 

 

[Throttle2]

  On 2/15/2025 at 8:50 AM, Wildfaye29 said:

https://www.straitstimes.com/opinion/industry-veterans-verdict-rising-supply-likely-to-push-down-coe-prices

Industry veteran’s verdict: Rising supply likely to push down COE prices

Research done by the writer shows clear link between supply and prices.

Victor Kwan UPDATED Feb 15, 2025, 02:21 PM

Singapore and Singaporeans have had a complex relationship with the certificate of entitlement (COE) for more than three decades. Everyone has a view on it. Here are mine – having spent 24 years in the automotive industry. In a nutshell, I believe the drop in COE prices is likely to continue, even though others may tell you the opposite. Let me explain why.

I remember that tense afternoon meeting some time in 2012. I was then the managing director of a Singapore-based automotive dealer group and was caught in the middle of a gut-wrenching professional roller-coaster ride akin to those at Disneyland. Except it was worse. My ride lasted years and not mere minutes. You see, COE supply was at a record low at that time. For an automotive dealer, this meant a minuscule market size, high COE prices, plummeting sales volume and even retrenchment. To make matters worse, things had been completely opposite just a few years prior – supply at a record high, the prices low and businesses expanding.

Amid this unhappy thrill ride, I was invited to a meeting with the Land Transport Authority. Given the unfavourable situation at that time, they were keen to hear the grouses from the ground. And grouse I did. These peaks and troughs in COE supply are unhealthy for the country’s transport system, not just commercially but socially as well, I said.

I proposed that LTA policymakers take the forecasted abundant COE supply from future years and insert some of it into the here and now. Not only would this solve our immediate supply pain, it would also prevent future roller-coaster rides. In other words, my proposal would allow all of us to live happily ever after (at least with car ownership) in one fell swoop. As history shows, my suggestion was not taken and our COE supply went through another peak about four years later and trough afterwards.

Fast forward a decade and you can imagine my smugness when LTA announced their “cut and fill” policy in May 2023. For the uninitiated, the mechanisms of cut and fill are broadly similar to what I had proposed in that meeting – that is, bringing forward future COEs to increase current availability and smooth future supply. As the proverbial saying goes, “better late than never” and kudos to LTA for that. A year later, they made another announcement that an additional 20,000 COEs, on top of those from cut and fill, will be gradually released.

Simple supply and demand

Since these two announcements, 18,000 COEs for cars and 3,000 for motorcycles have been brought forward. With this increase in supply, COE prices have also fallen an average of 25 per cent across the board, for cars, motorcycles and commercial vehicles (see chart).

To prevent speculation, few details have been revealed on when the additional COEs will be released. But one key message has been made official – the authorities will be using these new policies to ensure a consistent increase in supply of passenger and commercial vehicle COEs until the peak year of 2026.

In my current role as a faculty with the Singapore University of Social Sciences, I recently worked with a colleague to utilise an XAI-Enabled Deep Learning Approach and 20 years of public data on COE bidding to analyse past COE price fluctuations. Unlike other auctions that display evidence of irrational consumer behaviour, we conclude that COE prices closely follow the classical law of supply and demand. This means that when supply increases, prices will almost certainly follow a downward trend. In other words, the 25 per cent drop in prices since 2023 is likely to continue.

Don’t listen to fearmongers

However, the COE price is one of Singapore’s favourite coffee shop conversations – often spiced up with a generous dose of conspiracy theories – and there are more armchair analysts with “expert” views than at a Premier League football match. I have sat through a lifetime worth of these coffee shop talks and feel that many of these analysts with contrasting views are frequently fearmongers, Mr Always-Right or procyclical thinkers with little statistical basis.

In a way, I was a target of such irrational COE fearmongering when I was a young executive overseeing sales for a Korean car brand. When COE prices were high, a number of panic prophets warned me that nobody would buy Korean cars as prices were too high. And when COE prices were low, the same doomsayers cautioned that nobody would buy Korean cars as competitors were now able to price themselves competitively. If I had listened to them, I would have slipped into a depression, left the business and gone into selling Matchbox cars that need no COE. Thankfully, I did not and that Korean brand has since grown from strength to strength.

There is another funny story of a colleague who, before every COE bidding exercise, would call half his friends and proclaim that prices would drop. He then called the remaining half to predict that prices would increase. Regardless of the final price, he would always be revered for his forecasting prowess, depending on which half he called afterwards.

My advice to all hoping to own a new car? Supply will continue to increase and the drop in COE prices is likely to continue – so listen less to the fearmongers and trust the science.

I am putting money where my mouth (or keyboard) is. I am replacing my ageing car and have requested a relatively unusual arrangement with the dealer – bid low as I believe there is a chance of catching it at a good price. Supply is increasing and I am happy to wait. I raised a few sceptical eyebrows when relating this approach to some of my friends. Needless to say, I cannot wait for the day when I successfully secure my COE and have that same smug look when telling them, “I told you so”. I just need to make sure that when that time comes, I am talking to the correct half of my friends.

Dr Victor Kwan spent 24 years in the automotive industry and is currently a faculty at the Singapore University of Social Sciences. This article is written from his vantage point as both a reformed armchair analyst and a good scientist.

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and who are the biggest fear mongers always?   Dealers for COE and car prices.  Property agents for properties.  

 

[Lala81]

  On 2/15/2025 at 8:54 AM, Mkl22 said:

I don’t have Permanent Head Damage, also can see that with rising quota supply the prices will moderate la. 废话！

the key is moderate by how much. 

Expand  

when u go in, shoutout here hor. gam xia 🙂

[Sdf4786k]

  On 2/9/2025 at 3:52 AM, Lethalstrike said:

Yes, definitely will plateau.

As of 2024, about 4% of passenger cars (26,225) are EVs out of total passenger car population of 657,744. I'm of the opinion that Singapore's eventual sweet spot should be 18% EVs and the remaining ICE (Plug-in hybrids, mild hybrids, normal petrol, full hybrids etc). Why?

LTA's target by 2030 is 60,000 public charging points. So, assuming zero vehicle growth policy doesn't change and we still have around 660k passenger cars in 2030, 120k EVs (about 18.2% of 660k) sharing 60,000 charging points is about 2 EVs to 1 charging point ratio. Factor in the EV commercial vehicles and taxis sharing the charging points it should still be manageable, since not everyone needs to charge every day at the same time. 

But LTA's official plan is 5 EVs to 1 charging point ratio. That means they're looking at growing the EV population to 300,000. They are even more aggressive, aiming at 50% to be EVs. I honestly think at 5:1 ratio, we're going to see a lot of ugly behaviour and fighting for charging points already 😅

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with the exponential push to solid state battery tech to be introduce latest by 2027, with longer range and faster charging, the 60K may need to rethink ... 

[Micb]

https://www.channelnewsasia.com/singapore/private-hire-vehicles-lock-period-3-years-car-leasing-firms-lta-ncs-4945966

How will this affect today's COE bidding?   

Makes it more difficult for the leasing companies, due to the lock -in period.

[Gz0707]

  On 2/19/2025 at 4:00 AM, Micb said:

https://www.channelnewsasia.com/singapore/private-hire-vehicles-lock-period-3-years-car-leasing-firms-lta-ncs-4945966

How will this affect today's COE bidding?   

Makes it more difficult for the leasing companies, due to the lock -in period.

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There should be some impact on today coe. Existing PHV can only be sold to other companies and not private individuals anymore.  New PHV will have 3 year holding period.  So the buying process must be accurate. 

[Ginyu]

  On 2/19/2025 at 4:57 AM, Gz0707 said:

There should be some impact on today coe. Existing PHV can only be sold to other companies and not private individuals anymore.  New PHV will have 3 year holding period.  So the buying process must be accurate. 

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So those individuals who got their car  with phv 100% loan is considered as business owned or privately owned?🤣

Edited February 19 by Ginyu

[Invigorated]

  On 2/19/2025 at 5:10 AM, Ginyu said:

So those individuals who got their car  with phv 100% loan is considered as business owned or privately owned?🤣

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Business owned.

[Mcscot]

I am certain that the PHVs companies have been consulted about this change and / or warned about this potential change so they may have had some time to evaluate their numbers ...

[Koster]

Wonder if the reporters have already prepared their script for release later today. COE plunged due to LTA's coe supply increase and curb on PHV.