4 days ago
Bulk bids, influx of ultra-wealthy into Singapore exert upward pressure on COE
LESLIE Yee's recent commentary in The Business Times (Jul 28) is both timely and incisive: Singapore's Certificate of Entitlement (COE) system is increasingly out of step with today's realities. What was once a mechanism to regulate vehicle ownership now risks becoming a barrier to fairness and transparency. A comprehensive reform is long overdue.
The current COE framework lumps private hire operators, such as commercial rental firms, into the same bidding pool as individual car buyers. This is fundamentally flawed. These two groups operate with vastly different purchasing power and incentives. While individuals seek personal mobility, companies pursue fleet expansion and profit. Yet both are forced to compete under identical conditions, distorting the market and disadvantaging everyday consumers.
For most individual buyers, the COE bidding process is a black box. Car dealers typically handle the bidding on their behalf, bundling the COE into the final vehicle price. Final bidding prices submitted by dealers depend on the sales figures. Dealers are most willing to lower the profit margin for each car when more orders are secured, thus bidding up the COE prices.
Again, private hire firms often bid in bulk through dealers, who leverage economies of scale and submit aggressive bids, especially near the close of each exercise. These high-volume submissions artificially inflate COE prices, which then set the benchmark for subsequent rounds. The result? A relentless upward spiral in prices.
This vicious circle erodes public confidence and undermines the system's integrity. If the COE is to remain a relevant and equitable tool, it must be recalibrated to reflect the distinct needs and capacities of its participants. Separate bidding categories, greater transparency, and tighter regulation of bulk submissions could be a start.
And let's not ignore the broader economic shifts. The influx of family offices and ultra-wealthy individuals into Singapore will inevitably exert upward pressure on COE prices. Without intervention, the system risks becoming a playground for the privileged, leaving ordinary citizens priced out of car ownership.
Chia Cheng Tiam
