Set COE cap at 110,000 a year: Motor agents

SINGAPORE - Calls are mounting for a more even supply of certificates of entitlement (COE) to end the "feast or famine" scenario that Singapore now faces.

The Motor Traders Association is the latest to back the move, which supporters say could help stabilise prices that have veered wildly in recent years.

Meanwhile, the Land Transport Authority (LTA) is finalising changes to the 23-year-old system which limits the number of vehicles on the road by making all buyers bid for a certificate.

Last Friday, the association - whose members are authorised agents - submitted a proposal calling for the formula that determines the COE supply to be ditched.

It suggested capping the number given out each year at 110,000, with a buffer of 20 per cent. This could help prevent peaks and troughs, like the one car buyers are currently faced with.

Only 10,488 COEs were available to them between February and July, the lowest number since the system started in 1990. And prices have been volatile, swinging from $48,112 in February last year to $91,010 a year later for mass-market cars.

The association's president, Mr Glenn Tan, said a fixed supply would help dealers plan their resources and "bring about more stable COE prices and subsequently vehicle prices too".

He suggested changing the rules so commercial vehicles and motorcycles have to be deregistered or scrapped within 10 years, instead of up to 20. This would mean fewer of them on the road, leaving more COEs available for cars.

Mr Tan said not having as many old commercial vehicles around could bring other benefits such as improved fuel efficiency and a reduction in breakdowns. He added that an increase in the supply of COEs would still allow the Government to limit the annual growth in the vehicle population to 0.5 per cent for the next two years. The LTA said it received the proposal last week.

A spokesman said it is conducting a long-term study to "see if there is a practical way of putting aside some of the supply from the upcoming peak expected in the next few years, and to save it for the future when COE supply becomes tighter". She added that the proposal would be examined as part of this. Possible changes to the COE supply were a hot topic for academics and the motor industry during a briefing by the LTA on Monday. It followed a two-month public consultation on ways of making vehicle ownership more socially equitable.

Those at the briefing asked the authority to soften prices by smoothing out the peaks and troughs in the COE supply. Kah Motor general manager Nicholas Wong said: "Supply is still lagging too far behind demand... we can no longer rely on the car's 10-year cycle but must be more proactive in managing the quota and controlling the prices."

jermync@sph.com.sg

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