Car companies revving up for CNY buys
Chinese New Year promotions are in full gear and prospective car buyers are flocking to showrooms as COEs dip
New year, clothes, new shoes, new bags and even new cars?
Economists tell The New Paper on Sunday that demand for new cars usually goes up during the Chinese New Year.
And, of course, the lower Certificate of Entitlement (COE) prices this month add to the lure of getting a new car in time for the festive celebration, they say.
CIMB Private Banking economist Song Seng Wun, 56, says: "Festive seasons often boost the sales of cars and this time, the COE prices are an added incentive."
Car brands such as Mazda and Audi make sure they have enough stock for their car models.
Mazda's senior marketing manager David Chung, 42, says most of the recent car buyers requested for their cars to be ready by Chinese New Year.
He adds: "We ensure that there is sufficient supply by timing our shipment before Chinese New Year because we knew there would be such requests."
Mazda has seen a 50-per cent increase in sales since January last year.
Mr Lee Hoe Lone, managing director of Premium Automobiles for Audi, says: "Customers want a new car to celebrate the season. So it's critical for us to be able to deliver them promptly.
"Given the strong sales performance last year, stock level is low for some models of cars, but we are still able to offer registrations in time for the Chinese New Year if the customers act quickly."
Barclays economist Leong Wai Ho, 44, recommends that interested buyers get it "sooner than later".
He explains: "Now there are more discounts and the COE prices are down at $51,000 for the open category.
"It's a lot lower than its peak at $97,889 in January 2013 and when it was averaging at $61,000 in the second half of last year."
Premiums for small cars dipped sharply - by more than $9,000 to $45,002 - two weeks ago.
That saw prospective buyers, who had been waiting for lower prices, getting back into the showroom.
So it is no surprise that Category A for cars below 1,600cc or 130bhp jumped $6,299 to $51,301.
Mr James Page, Volkswagen Singapore's general manager of marketing and communications, says: "COE prices have a bigger effect on car sales than festive periods but, having said that, many car brands offer particularly attractive offers during the Chinese New Year period. So that helps the car sales, too.
"The $9,000 drop in Category A COE price two weeks ago led to crowded car showrooms.
"There are many people whose cars are due for de-registration, so a COE of less than $50,000 attracts them to buy a new car.
"It's a good month to buy a new car. Overall the COE prices are at the lowest level than they have been for several years.
"You can now get a new Volkswagen for under $100,000. Coupled with the Chinese New Year offers, it's definitely a very attractive buy."
Mr Song of CIMB says that while prices may seem "attractive" now, "it may not be the most ideal" because COE prices may drop even further within the coming months.
Now there are more discounts and the COE prices are down at $51,000 for the open category. It's a lot lower than its peak at $97,889 in January 2013 and when it was averaging at $61,000 in the second half of last year
—Barclays economist Leong Wai Ho
Latest COE prices
Premium for cars below 1,600cc and 130bhp jumped $6,299 to $51,301
Premium for cars above 1,600cc and 130bhp fell $4,831 to $50,089