Customers taking wait—and—see approach, say car dealers

SINGAPORE: It is the first weekend after the government announced on Friday a major new move for taxis — to cap its growth rate at two per cent per annum — between this month and December next year.

Channel NewsAsia investigates if the move made an impact on the car market.

The wait—and—see attitude of potential buyers is showing.

A handful of potential buyers showed up at the Nissan and Chevrolet showrooms on Sunday afternoon, while the Audi showroom had a stronger turnout.

Market watchers said more are choosing continental cars over Japanese cars.

Ken Lam, a potential car buyer, said: "It’s basically more value for money right now because the euro is lower and the Japanese yen is higher. Basically, the car prices are about the same, but you get better quality in continental cars."

However, car dealers said more viewings do not always mean higher sales.

Audi saw a 10 per cent drop in sales last month.

Business is expected to be affected as the government’s cut in COE quotas takes effect this month.

Thirteen per cent fewer COEs will be available from August 2012 to January 2013, compared to the previous six—month period from February to July 2012.

COE premiums already reached historical highs in July.

COE premiums in Category A saw the sharpest increase, with the premium rising 15.5 per cent or S$9,235 to S$68,656.

James Tan, assistant sales manager, Premium Automobiles, said: "I guess the COE significance will rise upon this COE bidding. We’re looking at above S$100,000 for Cat B. Cat A we probably can see up to over S$90,000, that kind of range."

Car dealers Channel NewsAsia spoke to expect COE prices to rise even further in the next round of bidding. And while this might have resulted in a wait—and—see attitude among some potential car buyers, others said they do not want to risk COE prices rising even further.

Stephen Ho, a potential car buyer, said: "I can’t see the COE going down anymore. We waited six months for it to go down, and it hasn’t."

Bidding for the August round of COEs opens on Monday at noon and closes on Wednesday at 4pm.

— CNA/cc