SINGAPORE: With Certificate of Entitlements (COE) for motorcycles reaching a record high of S$8,081 on Wednesday (Apr 29), motorcycle dealers and owners alike are bracing for further increases. Coupled with the three-tiered Additional Registration Fee (ARF), average motorcycle users who wish to buy a new set of wheels are feeling the financial pinch.
Such is the plight of Class 2B rider Shamsul Aziz, who had hopes of upgrading his motorcycle to a larger and safer Class 2A machine. The 30-year-old, whose motorcycle’s COE still has some way to go before expiring, hopes that premiums will come down again soon.
“It is going to be hard for a normal rider like myself, who uses his motorcycle to commute to work,” said the Yamaha RXZ rider.
“There are riders who do not earn that much and are trying to make ends meet. With the ever increasing prices, they can only manage to renew their bikes for another five years and then eventually scrap their bikes after five years.”
Another motorcyclist, Mr Muhammad Satria, plans to renew his COE instead of buying a newer model in a few years’ time. “I will not upgrade my motorbike in the meantime. Personally I think bike COEs can even reach S$10,000 by the end of the year,” said the Honda CB400X rider.
“I also feel for those dispatch riders who have expiring COEs for their smaller bikes, and require a new motorcycle. It will affect them, as their livelihoods depend on motorcycles and they’re most affected by the new COE increase,” said Mr Satria, who noted that the cost of a COE for a motorcycle now exceeds the cost price of an entry-level Class 2B motorcycle.
One of the motorcycles at Republic Motors. (Photo: Noor Farhan)
Already, there are not enough motorcycle COEs to meet demand, according to the Singapore Motor Cycle Association’s honorary general secretary Norman Lee. A portion of the COE quotas that are generated from the scrapping of old motorcycles goes to the Open category instead.
“There were never enough COEs to begin with, especially so in the past three years where the supply of COEs can’t meet the demand,” he said. “From 2003 to 2013, the average was 12,000 new motorcycles registered per year. But in 2014 to 2016, the amount of COEs available was only about 8,000 each year.”
The lack of COEs to go around has been compounded by higher-end bike owners who renew their COEs ahead of time, according to Mr Lee. “After the implementation of the ARF for motorcycles, there was an inclination for those who own motorbikes in the newly defined luxury bike category to renew their nine- or 10-year-old COE (early).
“It made commercial sense to do so, as they would not be able to buy the same kind of motorbikes in the future, for the same amount of money today. When they renew, these people take the quota premiums out of the pool of COEs available,” he said.
”As for those (in the lower income bracket) who have COEs expiring, they will find it hard to extend their COEs due to the high prevailing quota premiums (PQPs). That’s because it should cost them about S$6,800 right now to renew their current COEs for five years (under the PQP scheme). When these owners choose to scrap their motorcycles, 10 per cent of those COEs being scrapped goes to the Open category, never to come back.”
Given the current out-of-reach ownership costs coupled with the limited supply of COEs for motorcycles, dealer Eugene Mah of Mah Ltd is unsure whether things will get better for the average buyer. “The increase in COE since the implementation of the three-tiered ARF has been both unexpected and unsettling.
“The new ARF measures, which were put in place very quickly and without consultation, are clearly not working out for anyone. We can only hope COE prices will start falling from this peak soon, possibly from changes for motorcycles in the COE Open Category quota in May,” said Mr Mah.
Republic Motors owner Jimmy Xie is not optimistic. “In my opinion, I don’t think (motorcycle COEs) will fall any time soon. But I do believe a time will come when the COE prices will reach a peak, to the point where it’ll be out of reach to people who need it most. When that happens, those who need to have their COE renewed for their current bikes, will be unable to pay for it.
“I hope that the Government will look into doing something to balance the market. Although the intention of the new ARF system was to tax bigger bikes, I still that hope there is some control method by the Government in setting the COE prices, so that it wouldn’t keep increasing upwards.”
Motorcycle dealers Channel NewsAsia spoke to say that they would not be surprised if COEs for motorbikes hit the S$10,000 mark. The Singapore Motor Cycle Association’s Norman Lee hopes that this does not become a reality as dealers may need to offer discounts to keep bikes affordable.
“For some dealers, to prevent potential customers from walking away and therefore having additional inventories of unused COEs, some companies are offering rebates to help sell their bikes.
“There can only be a limit though, as to how much these dealers can provide a rebate. Motorcycles were never given a chance (to grow) in Singapore. I hope (motorcycle COEs) won’t reach S$10,000 as I’d rather switch to selling bicycles instead.”
