As the news of the impending injection of up to 20,000 Certificates of Entitlement (COE) in Singapore reverberates across the automotive industry, car dealers’ reactions paint a diverse picture of anticipation and apprehension. Dealers are now bracing for a short-term impact on their businesses, with customers adopting a cautious stance in light of the potential COE price adjustments.
According to CNA, The impending spread of the additional COEs across all vehicle categories starting from February 2025 has raised uncertainty among buyers, as they eagerly await a possible decline in car prices.
Car dealers have wanted more clarity on the timeline and distribution of additional COEs in other vehicle categories. This COE is a proactive measure to prepare for implementing ERP 2.0, a Land Transport Authority (LTA) system featuring virtual gantries to aim at managing traffic congestion.
Mr. Neo Nam Heng, Chairman of Prime, a diversified motor group, remarked that potential car buyers are likely to delay their purchases in case the COE price rate drops. With the premium for Category B cars, encompassing larger and more powerful vehicles, reaching a high of S$116,002 this year, buyers are cautious about making significant financial commitments.
Mr. Benjamin Loo, Chief Operating Officer of Cartimes Automobile, also expected a short-term slowdown in business as customers apprehensively weigh the possibility of acquiring vehicles at inflated prices amidst the uncertainty surrounding COE price movements.
Despite the short-term concerns, dealers hold onto a sense of optimism, believing that the effects on their businesses might not be as severe as initially feared. This optimism stems from the long-term perspective wherein dealers anticipate a boost in sales once up to 20,000 additional vehicles are permitted on the roads. This long-term outlook offers a ray of hope amidst the current uncertainties surrounding COE dynamics.
As the countdown to the COE injection commences, dealers brace for a period of flux, balancing short-term challenges with long-term opportunities. The infusion of 20,000 COEs, alongside the forthcoming ERP 2.0 implementation, sets the stage for a paradigm shift in the automotive industry, compelling dealers and customers alike to adapt to a changing landscape with resilience and strategic foresight.
