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18-03-2013, 07:50 AM
After prices drop, suddenly you realize there are so many cash-rich people who are super eager to get a car. This was certainly beyond my wildest expectations! I had thought everyone would hunker down and give up their "dream". Oh well.
The Straits Times
www.straitstimes.com
Published on Mar 17, 2013
THE WEEK COE PRICES PLUNGED
New car sales JUMP
Cash-rich buyers flock to showrooms as COE rates for big cars dip and dealers cut prices
By Walter Sim
Sales of new cars improved and there were sharp increases in customer traffic on the first Saturday after certificate of entitlement (COE) prices plunged last week, showrooms reported.
This was the first bidding exercise after the Government announced drastic car loan curbs and a tiered tax system last month that hit luxury cars hard.
Premiums for cars above 1,600cc fell nearly 37.3 per cent to close at a two-year low of $58,090. Open Category COEs, used chiefly for bigger cars, also ended 29.3 per cent lower at $65,001, also a two-year low.
Meanwhile, premiums for those up to 1,600cc closed at $74,689.
After the bidding exercise, car dealers began slashing prices ranging from a modest $1,000 to over $30,000, to take into account the fall in COEs, and in anticipation of the next round of bidding.
Yesterday, many car hunters were eager to score a good deal on a new luxury car.
Heavier-than-average foot traffic was reported by these dealers as cash-rich buyers shopped around, with sales also on the rise. Mr Victor Kwan, managing director at Volvo agent Wearnes Automotive, said foot traffic and sales tripled that of an average weekend.
"For this period, sentiments will be primarily driven by the COE price plunge," he said, adding that Volvo has priced in discounts of between $20,000 and $30,000 for both Category A and Category B vehicles.
Mr Ron Lim, general manager of Nissan agent Tan Chong Motor, said sales and traffic were up over the previous weekend.
Nissan car prices for Category A have been cut by $27,000, while Category B cars are cheaper by $31,000 than before bids closed last Wednesday.
The spike in traffic is a U-turn from two weeks ago, when buyers steered clear of showrooms because of the car loan curbs. Buyers must put a down payment of at least 40 per cent for a new vehicle, while the maximum tenure for a car loan is now limited to five years.
A 51-year-old IT executive who bought a new BMW 520i yesterday said it was time to take the plunge after months of waiting on the market. He declined to give his name, but said: "We have always wanted to upgrade our Toyota Corolla, but felt it was not sensible due to the high COE prices then."
Others felt a wait-and-see approach was prudent.
Auditor Michelle Tan, 28, was seeking a second car in addition to her family's Audi A5 Coupe, and looked at the Audi Q3, BMW X1 and Mercedes-Benz B2000.
She too was tempted: "We were looking for a second-hand car, but now that the COE prices have fallen, it is more worthwhile to look at a new vehicle. But we feel there may still be scope for prices to drop further."
But if the demand for Category B cars persists, COE prices may well rise in the next bidding exercise.
Said Mr Johnny Tan, sales manager of Mazda for Trans Eurokars: "It is all about demand and supply. With a fixed number of COEs and such high demand, prices will likely go up."
waltsim@sph.com.sg
--------------------
The Straits Times
www.straitstimes.com
Published on Mar 17, 2013
THE WEEK COE PRICES PLUNGED
Used car sales SLUMP
By Jermyn Chow
Used car dealers reeling from the effects of tough new car loan curbs are urging landlords to cut their rent, while they try to sell off vehicle stock to stem losses.
More than 100 bosses of used car centres in Turf City and Commonwealth are asking for the reprieve after last month's drastic measures to cool the market kept customers away.
Things are set to worsen in the wake of tumbling certificate of entitlement (COE) premiums and dealers of new cars slashing prices.
Second-hand car sales have more than halved but dealerships say their monthly rentals form about 40 per cent of overhead costs. At Turf City, for example, they pay between $6,000 and $9,000 for an office and 15 car lots.
Sixty-two of the 70 second-hand dealerships there have teamed up to write to landlord Cogent Holdings, asking to meet to discuss rent cuts or have their contracts reconsidered. Cogent, however, has declined to meet up.
At Commonwealth, more than 40 dealerships are writing to the Singapore Land Authority to ask for rent waivers.
Given the plunging sales and high costs, many say they are considering closing down. Dealers told The Sunday Times that at least 20 dealerships islandwide have pulled down their shutters for good, with dozens set to follow suit.
Apex Trading managing director Thomas Lim, who is spearheading the Turf City appeal, said: "Our sales and commissions are down, we incur huge losses with each transaction but still pay the same overheads... How to survive?"
Second-hand car values have fallen by as much as 30 per cent.
The asking price for a year-old BMW 5 series is now $190,000, down from about $215,000 before the Feb 26 loan restrictions. But car buyers are still not biting.
Mr Lim said: "We are no longer running a business. We can only cut prices, get rid of our stock and pray things get better."
Mr Andrew Cheong, 42, of In-carz Automobiles in Commonwealth, did not sell a single car last week. "I've been through a few bad cycles when the authorities tightened car ownership policy but this is the worst I've seen," he said.
The cooling measures cap car loans at up to 60 per cent of purchase price and halve the loan's maximum duration to five years.
The Singapore Vehicle Traders Association has appealed to the Monetary Authority of Singapore to ease loan restrictions. Its latest proposal is that new loan curbs not be applied to vehicles bought by used car dealers before Feb 26, when the restrictions kicked in.
Association president Neo Tiam Ting, representing more than 400 used car dealers, said he has not heard from the MAS.
He told The Sunday Times he plans to send a petition to Prime Minister Lee Hsien Loong this week, adding: "Something needs to be done now to stop the used car industry from hitting a dead end."
Yesterday, Mr Neo and a group of car dealers met Senior Parliamentary Secretary of Education and Communications and Information Sim Ann in the Turf City used car centre. She declined to say what was discussed during the hour-long meeting.
Mr Eugene Chng of Cosmo Automobiles said: "Any kind of help now would be good. It is like a waiting game to see who goes bust first."
The Straits Times
www.straitstimes.com
Published on Mar 17, 2013
THE WEEK COE PRICES PLUNGED
New car sales JUMP
Cash-rich buyers flock to showrooms as COE rates for big cars dip and dealers cut prices
By Walter Sim
Sales of new cars improved and there were sharp increases in customer traffic on the first Saturday after certificate of entitlement (COE) prices plunged last week, showrooms reported.
This was the first bidding exercise after the Government announced drastic car loan curbs and a tiered tax system last month that hit luxury cars hard.
Premiums for cars above 1,600cc fell nearly 37.3 per cent to close at a two-year low of $58,090. Open Category COEs, used chiefly for bigger cars, also ended 29.3 per cent lower at $65,001, also a two-year low.
Meanwhile, premiums for those up to 1,600cc closed at $74,689.
After the bidding exercise, car dealers began slashing prices ranging from a modest $1,000 to over $30,000, to take into account the fall in COEs, and in anticipation of the next round of bidding.
Yesterday, many car hunters were eager to score a good deal on a new luxury car.
Heavier-than-average foot traffic was reported by these dealers as cash-rich buyers shopped around, with sales also on the rise. Mr Victor Kwan, managing director at Volvo agent Wearnes Automotive, said foot traffic and sales tripled that of an average weekend.
"For this period, sentiments will be primarily driven by the COE price plunge," he said, adding that Volvo has priced in discounts of between $20,000 and $30,000 for both Category A and Category B vehicles.
Mr Ron Lim, general manager of Nissan agent Tan Chong Motor, said sales and traffic were up over the previous weekend.
Nissan car prices for Category A have been cut by $27,000, while Category B cars are cheaper by $31,000 than before bids closed last Wednesday.
The spike in traffic is a U-turn from two weeks ago, when buyers steered clear of showrooms because of the car loan curbs. Buyers must put a down payment of at least 40 per cent for a new vehicle, while the maximum tenure for a car loan is now limited to five years.
A 51-year-old IT executive who bought a new BMW 520i yesterday said it was time to take the plunge after months of waiting on the market. He declined to give his name, but said: "We have always wanted to upgrade our Toyota Corolla, but felt it was not sensible due to the high COE prices then."
Others felt a wait-and-see approach was prudent.
Auditor Michelle Tan, 28, was seeking a second car in addition to her family's Audi A5 Coupe, and looked at the Audi Q3, BMW X1 and Mercedes-Benz B2000.
She too was tempted: "We were looking for a second-hand car, but now that the COE prices have fallen, it is more worthwhile to look at a new vehicle. But we feel there may still be scope for prices to drop further."
But if the demand for Category B cars persists, COE prices may well rise in the next bidding exercise.
Said Mr Johnny Tan, sales manager of Mazda for Trans Eurokars: "It is all about demand and supply. With a fixed number of COEs and such high demand, prices will likely go up."
waltsim@sph.com.sg
--------------------
The Straits Times
www.straitstimes.com
Published on Mar 17, 2013
THE WEEK COE PRICES PLUNGED
Used car sales SLUMP
By Jermyn Chow
Used car dealers reeling from the effects of tough new car loan curbs are urging landlords to cut their rent, while they try to sell off vehicle stock to stem losses.
More than 100 bosses of used car centres in Turf City and Commonwealth are asking for the reprieve after last month's drastic measures to cool the market kept customers away.
Things are set to worsen in the wake of tumbling certificate of entitlement (COE) premiums and dealers of new cars slashing prices.
Second-hand car sales have more than halved but dealerships say their monthly rentals form about 40 per cent of overhead costs. At Turf City, for example, they pay between $6,000 and $9,000 for an office and 15 car lots.
Sixty-two of the 70 second-hand dealerships there have teamed up to write to landlord Cogent Holdings, asking to meet to discuss rent cuts or have their contracts reconsidered. Cogent, however, has declined to meet up.
At Commonwealth, more than 40 dealerships are writing to the Singapore Land Authority to ask for rent waivers.
Given the plunging sales and high costs, many say they are considering closing down. Dealers told The Sunday Times that at least 20 dealerships islandwide have pulled down their shutters for good, with dozens set to follow suit.
Apex Trading managing director Thomas Lim, who is spearheading the Turf City appeal, said: "Our sales and commissions are down, we incur huge losses with each transaction but still pay the same overheads... How to survive?"
Second-hand car values have fallen by as much as 30 per cent.
The asking price for a year-old BMW 5 series is now $190,000, down from about $215,000 before the Feb 26 loan restrictions. But car buyers are still not biting.
Mr Lim said: "We are no longer running a business. We can only cut prices, get rid of our stock and pray things get better."
Mr Andrew Cheong, 42, of In-carz Automobiles in Commonwealth, did not sell a single car last week. "I've been through a few bad cycles when the authorities tightened car ownership policy but this is the worst I've seen," he said.
The cooling measures cap car loans at up to 60 per cent of purchase price and halve the loan's maximum duration to five years.
The Singapore Vehicle Traders Association has appealed to the Monetary Authority of Singapore to ease loan restrictions. Its latest proposal is that new loan curbs not be applied to vehicles bought by used car dealers before Feb 26, when the restrictions kicked in.
Association president Neo Tiam Ting, representing more than 400 used car dealers, said he has not heard from the MAS.
He told The Sunday Times he plans to send a petition to Prime Minister Lee Hsien Loong this week, adding: "Something needs to be done now to stop the used car industry from hitting a dead end."
Yesterday, Mr Neo and a group of car dealers met Senior Parliamentary Secretary of Education and Communications and Information Sim Ann in the Turf City used car centre. She declined to say what was discussed during the hour-long meeting.
Mr Eugene Chng of Cosmo Automobiles said: "Any kind of help now would be good. It is like a waiting game to see who goes bust first."
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