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how to solve COE volatility? Gov doing the pricing


Wind30
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still no answer after 6 pages. Let me add more confusion to the discussion.

To solve COE price volatility, first is to balance the COE quota distribution over the 10 years, there must be equal number of COEs every year, otherwise the price volatility will happen.  But that still does not mean COE price will not fluctuate, it will still go up and down to some extent, during the good years, COE price will increase because people have more money to spend. Likewise when a few popular brands start to launch new model at the same time, COE price will go up as well due to the competition.

We have to understand that COE quota is a 3 decades old problem, while it can be solved, it will come with a huge price. There are only 600,000 COE available in total. During the low COE quota period now,  LTA will not increase COE quota allocation, so the only option left is for LTA to pull back COE during the high COE quota period to reserve them for low COE quota years, when this happen, those people who scrap their cars when LTA is tightening COE allocation, COE price will shoot through the roof. The situation can last for a few years, can we afford that ?

One more thing, COE will not stay low when COE quota is evenly distributed, it will likely be higher instead. Take for example, Cat B was $30k during the low and $110k during the peak, assuming COE should average around 50k with a flat COE distribution, it may end up higher because there is no more bumper crop COE, COE supply will be tight all the time, resulting in price increase. And when people are used to $50k, dealer will start to bid higher and higher to compete among themselves to secure car delivery.

At the end of the day, removing COE volatility will only create a more predictable COE price trend, it will not reduce COE price overall. There are only 60k COE available per year,  it transltaes into 5,000 COE per month or about 1,250 COE per CAT per bidding exercise, there will be no cheap COE, those who could not afford would still unable to afford.

Edited by Ct3833
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Gov doing the pricing?

You can control the price

or the quantity but you cannot control both!

:D

If set price too high not all quota taken up

If you control quantity then price will go up and down.

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Turbocharged

One interesting suggestion I heard is pegging coe rebate to current coe price vs paid coe price. Coupled with full cash coe, I think it will reduce the volatility by a lot without much changes if gov is adverse to making big changes.

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On 8/3/2022 at 8:45 AM, yishunite said:

Going round and round now lol

Basic thing is COE is an ownership tax, not usage tax. But despite quota frozen for many years now the usage has skyrocketed thanks to PHV and rentals. Meanwhile those who use their car less (for private purpose) have to pay the same premium as a commercial user of the car who contributes 90% of the congestion on the road.

So you wanna get serious about tackling congestion need to focus tax around usage. Satellite ERP? Maybe but pls not with 20th century tech. For me this usage question is the most important reason why car rental and PHV need to split out from general COE quota. They broke the system

Rippling effect caused by disruptive start-up techs that are not appropriately contained or regulated. ://

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Supercharged
5 minutes ago, mikk123 said:

Nobody ask CNA to write. It is such a hot topic that it is impossible to ignore. Let's the minister can pretend nothing is wrong for how long. 

The current transport minister like quite relax leh. Not many things to solve compared to Lui and Khaw. He should try to solve this COE problem now. 

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12 minutes ago, Daniu82 said:

The current transport minister like quite relax leh. Not many things to solve compared to Lui and Khaw. He should try to solve this COE problem now. 

Who's the transpork minister now? 

Edited by Volvobrick
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Sudden epiphany.

1) If we all agree that car is a luxury, why do we need to control the volatility ?

2) For the well heeled and car affordability is with a comfortable margin, when they want a car, they buy a car, volatile COE or not.

3) Everyone agree that, base on supply and demand and human psyche, a non volatile COE will just result in a higher baseline of COE premium to fluctuate about. Are we trying to make it cheaper for the rich to buy a car or more expensive for the less well heeled to own one?

 

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1 minute ago, Volvobrick said:

Who's the transpork minister now? 

Useless guy, hair all white.

Only care about airport traffic.

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Supercharged
2 minutes ago, mikk123 said:

hiding in some holes and stay low. I also don't know. 😁

Maybe busy thinking how to prata flip on the EV situation. 😁

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4 minutes ago, Daniu82 said:

Maybe busy thinking how to prata flip on the EV situation. 😁

To be fair, he took over someone's prata to begin with.

That someone wanted an overly ambitious prata bomb, he now thinking how to flip it to a simple kosong. 😁

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37 minutes ago, mikk123 said:

luxury means high price lah, how come linked to volatility? more volatility more luxury?  

volatility benefits no body. Suzuki is closing down soon. How about all the suzuki staff, showroom staff, workshop staff, admin staff, cleaners? all laid off. A few years later, when the COE is low again,then they are re-employed again? Is this good for the society? 

Suzuki not a luxury brand. 

Car brands just have to evolve with the consumer demands in the environment created by our govt. Those that do not fit in with the environment will not survive....Darwin's Theory of Evolution. Nobody owes anyone a living. All the laid off staff can always find other car brands that are doing well to join.

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34 minutes ago, Vratenza said:

Suzuki not a luxury brand. 

Car brands just have to evolve with the consumer demands in the environment created by our govt. Those that do not fit in with the environment will not survive....Darwin's Theory of Evolution. Nobody owes anyone a living. All the laid off staff can always find other car brands that are doing well to join.

One can say financial crisis boom/bust is also Darwin's law and survival of the fittest. Still not good to have... in fact whole story of human civilization is to make a situation that is better than when we live in trees

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1 minute ago, yishunite said:

One can say financial crisis boom/bust is also Darwin's law and survival of the fittest. Still not good to have... in fact whole story of human civilization is to make a situation that is better than when we live in trees

Our technological innovations and medical advances are making people live longer than our ancestors to what end? Are we better off now?

Defects in genes naturally would have been weeded off during the course of survival have been kept in circulation longer and longer just because these vessels gets the chance to reproduce more than our ancestors.

Are we reproducing just for the sake of replacing the human population and a cheap and stable COE helps to achieve that very end?

Just shooting off my thoughts under the influence of hypoxia from my N95 mask I have been wearing the whole morning.

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Personally I prefer to have a life expectancy of 80 rather than 40 so yes, I say we are better off

If ppl dunno how to make meaning of their life that is their problem not mine.

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On 8/3/2022 at 8:07 AM, Calvin8808 said:

Having more and cheaper COEs doesn't mean the revenue will be less. For example, selling 500 COEs at $100K a piece ($50m) compared to selling 2,000 COEs at $60K a piece ($120m). Not to forget more cars on the road, more ERPs to be collected, fuel duties etc. That's if the intention is really just to generate revenue. Also what's stopping the Govt to issue more COEs and at the same time all COEs have a reserved price of at least $80K?

 

 

The govt will want to sell the 2000 COE at $100k each too. kthxbye.

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16 minutes ago, yishunite said:

Personally I prefer to have a life expectancy of 80 rather than 40 so yes, I say we are better off

If ppl dunno how to make meaning of their life that is their problem not mine.

not the meaning of life...the quality of life....

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