With all the factors affecting the COE bids and their pricing, and the recent events like the motor show and Chinese New Year rolling around real soon, how are these going to affect us in the short or immediate future of February 2019 COE and PQP?
A short recap:
Round 1 COE bidding results for January 2019:
Cat A $25,920
Up by $419 compared to second bid of the month of December 2018.
We attribute the main reason for this rise to the coming Chinese New Year and cars to be delivered in the coming weeks leading up to the CNY. However, the rise is weak and this is likely due to the lack of exciting models in Cat A. We are at the $25k level and yet the situation is very unlike the drop to $25,000 in the first bid of July of 2018, which immediately saw a jump the next bid back to $32,699. That time in July, LTA had given the reason of the fall as a technical glitch which stopped dealers using the online bid system from submitting successfully. Which could explain the immediate jump back to $32k the next round, given that many bids could not go through and were still awaiting fulfillment.
Forecast: Car buyers are getting used to this level of COE for Cat A and not in a hurry to sign on the dotted line without further falls. If we remain at this level after the CNY, the Cat A at around $25k could be the new normal. We see the coming second bid of January at the same level or only slightly up. This is barring any unforeseen shrinkage in COE quantity for the quarter starting February, to be announced by LTA later this month.
Cat B $32,200
Up by $1,199 compared to the second COE bid of December 2018.
This is not an insignificant rise in Cat B and probably due to the lower number of COEs in this category combined with new models in this category with the CNY factor. New models from Subaru’s entire range is now Cat B only and not a single car model they have is in Cat A. This of course includes the recently launched Forester, a top selling SUV for the popular brand, and ahem, one that I may consider getting. Mercedes also has new refreshed Cat B cars showcased at the recent motor show, including the popular C 180 a popular evergreen that will give some support to Cat B bidding. There were a total of 25 new models being introduced at the motor show and majority of these are Cat B (quick count reveals that to be more than 20 out of 25), given now that Cat B is not just 1.6L and below but also any car that is above 130hp.
Forecast: The above being the case, we see continued support and upward trend on Cat B for the mid term till the fizz dies out from the sparkle of new models being launched.
Cat C $27,002
Up by $1! Compared to the last bid of 2018
This segment is a reflection of commercial activity and economic sentiment. And its downward trend is telling of the current state of business for those in logistics and contracting.We also feel this category is not affected by seasonal effects such as the CNY. If anything, most chinese run SME companies could be resting during this time and postponing any major decisions such as the purchase of new vehicular assets.
Forecast: We see a weak bid going forward for Cat C and a fall coming in the immediate next bid of at least a few hundred.
So How About the PQP for February 2019 Renewal?
Given the above situation for COE bidding, the below is our prediction for those looking to renew their COE soon, and those whose expiry is February should be especially interested.
PQP Cat A $25,689
Down by $358 compared to Cat A PQP of the month of January 2018.
PQP Cat B $32,818
Up by $1,483 compared to Cat B PQP of the month of January 2018.
PQP Cat C $27,337
Down by $834 compared to Cat C PQP of the month of January 2018.
What Do I Do Next If My Car is Coming Up for Renewal?
Keep a lookout on our website for the PQP result for February, now out!
Of course, look out for upcoming predictions for the coming months here on our site!
But if you would like personal advice for your situation, a loan to go along with your renewal, and our professional services to get that all done for you at the correct timing with our PQP monitoring service, do click on the below to find out more or WhatsApp us using the button on this page. Alternatively, contact us using the contact form for the best advice on how to do your renewal smoothly and at the most opportune time.