Call to tweak COE system as small cars fight to fit in

As the government looks at two possible ways to ease the COE supply crunch, some motor distributors are hoping it will go further and tweak the certificate of entitlement system itself, in particular, the Open Category COE.

The Open Category or Category E COE is transferrable, unlike the other categories.

But with Cat B COEs in short supply, Cat E has recently been used by motor traders to register luxury cars.

As a result, the Cat E premium currently tracks the Cat B premium, and they stand at $92,010 and $91,000, respectively.

On the other hand, the premium for Cat A - for small cars or those under 1,600cc - is only at $64,201 now.

"Dealers of luxury models have bigger profit margins, so they are able to bid more for a COE," said the sales manager of a Japanese dealership. "As sellers of cheaper bread and butter models, we can't compete with them. So we have been priced out of the Cat E COE segment."

For a fairer system, George Lee, general manager of Opel distributor Auto Germany and Chevrolet dealer Alpine Motor, would like the government to consider splitting the Open Category so that some Open Cat COEs can be used only to register Cat A cars while the others are reserved specifically for Cat B models.

"Right now, the system is unfair to Cat A models because Cat B car sellers are monopolising Cat E with their stronger purchasing power," said Mr Lee. "This defeats the purpose of having an Open Category COE that can be used to register all vehicles."

ORIGINAL SOURCE: http://motoring.asiaone.com/Motoring/News/Story/A1Story20120509-344795.html
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