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Friday, Aug 22, 2014

Transport

Year-end bumper crop of COEs expected

tabla! | Friday, Aug 22, 2014

IT MAY only be August, but car buyers and sellers have received the first sign that it will be a merrier Christmas at the showrooms in December.

The number of cars deregistered last month was the highest in recent years, based on the latest official data. This, according to industry watchers, is a sure sign that the next certificate of entitlement (COE) quota (November to January) will be a sizeable one - estimated to be double the supply last Christmas.

COE quotas are determined largely by the number of vehicles scrapped in the preceding three-month period. Last month, 2,724 cars were deregistered - the highest monthly figure in over three years.

Figures for the following few months are likely to be similar, if not higher. This is because cars bought between 2004 and 2008 - when the most number of COEs were available - are reaching the end of their 10-year lifespan.

SIM University urban transport management expert Park Byung Joon said "it is reasonable to expect the deregistration figure to continue rising until 2018". And that would "definitely lead to a long-term downward trend" for COE premiums, but he said prices are unlikely to return to the previous lows witnessed in 2006 and 2007, when they fell below $20,000.


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