Bikers, dealers react to record-high COE premiums
Record-high motorcycle COEs give riders the chills
It is like a recurring nightmare for biker Ahmad Zohree.
The news of motorcycle certificate of entitlement (COE) premiums being on the uptrend, especially Wednesday's record high of $6,889, has stalled his dream of owning a new motorcycle.
Like other bikers, Mr Zohree is praying for a window where premiums stabilise and fall to reasonable levels.
But the start of the year's COE bidding exercise may signal bad things to come.
Mr Zohree, 34, said: "Mampus (Malay for die). If the situation doesn't improve, I can't imagine taking public transport to work. It takes too long without my scooter."
Riding his eight-year-old 200cc Gilera scooter to work each day - from his home in Punggol to his office in Penjuru Road - is a breeze, especially in light morning traffic.
Mr Zohree, a service engineer who heads to work at around 7am, said: "It takes 35 minutes tops to get to work. If I take public transport like trains and feeder buses, it takes me between 90 and 120 minutes."
The sole breadwinner said the inconvenience and transport costs will rise without the use of a motorcycle as he is also required to visit secluded work sites.
Premiums for Category D (motorcycles) rose by $289 from $6,600 in the Dec 23 tender.
Since last year, the motorcycle industry has been urgently asking the authorities to step in and ease the pent-up demand for motorcycle COEs.
Mr Ong Kim Hua, sole distributor of KTM motorcycles in Singapore, said: "We can try to absorb some of the increase in COE premiums to help our dealers. But we can't keep absorbing."
Across the board, all motorcycle brands sold here, except for a handful, saw a decline in yearly new motorcycle registrations in 2015.
Statistics from 2004 reflected healthier yearly registration numbers hovering above the 12,000 mark. In 2014, yearly registration figures stood at about 8,000 new motorcycles.
For 2016, the outlook isn't expected to improve.
Mr Ong said: "I used to think those who are able to buy pricier KTM motorcycles could afford to withstand increases in COE premiums. I'm a little concerned now when my customers tell me they'll wait and see before buying their next KTMs."
Some industry players believe the current low supply of COE quotas for motorcycles and the "bleeding out" of motorcycle COEs to contribute to the open class (Category E) are to blame. Ten per cent of de-registered motorcycle COEs are transferred to Category E.
Mr Lee Kwan Meng, a spokesman for Hong Leong Yamaha, said: "An increase of $30 to $50 in bike COE premiums is okay. But jumps of between $200 and $300 each time are worrying.
"The solution is simple, Category D needs more COE quotas to cool premiums."
At present, there is quota of about 350 motorcycle COEs in each bidding exercise, compared to between 500 and 700 in 2004.
High COE premiums hurt lower-income riders like Mr Zohree, who is eyeing the 200cc and below category. This category makes up about 70 per cent of the total bike population.
In 2013, for example, a biker could buy a small motorcycle for less than $6,500 with COE premiums then below $2,000.
But prevailing COE premiums will now make the same motorcycle cost twice as much, said Mr Rex Tan of Ban Hock Hin.
Mr Tan said: "Today, a biker will see his monthly instalments double after buying a small bike."
Going the second-hand route, while appealing due to cheaper prices, may seem like an obvious choice. But it might not be a long-term solution.
Mr Ong said: "Sooner or later, prices for the second-hand market will also increase as more who can't afford to buy new motorcycles venture this route.
"An up-and-up bike COE price trend neither benefits sellers nor buyers."
Mampus (Malay for die). If the situation doesn't improve, I can't imagine taking public transport to work. It takes too long without my scooter.
- Mr Ahmad Zohree (above)
An increase of $30 to $50 in bike COE premiums is okay. But jumps of between $200 and $300 each time are worrying. The solution is simple, Category D needs more COE quotas to cool premiums
- Mr Lee Kwan Meng, a spokesman for Hong Leong Yamaha
REMEMBER $1 BIKE COES?
Believe it or not, there used to be a time when motorbike COE premiums cost only $1.
This was around 1991 to 1993.
COE quotas were also higher then, particularly in November 1993 when there were 7,079 COE quotas available. Successful bids then hit only 1,090.
However, in November 1995, premiums bust the $4,000 mark with the quota drastically reduced to 652. The total number of bids received then was 1,507.
Fast forward to 2015 and owning a motorcycle became much pricier, with COE premiums starting at $4,403 in January and hitting $6,600 by Dec 23.
Wednesday's COE bidding exercise set a record with premiums at $6,889. The quota was 328 and the bids received were 409.