LTA tweaks calculation of commercial vehicle COE quota to even out supply

[kobayashiGT]

Source: https://www.straitstimes.com/singapore/transport/lta-tweaks-calculation-of-commercial-vehicle-coe-quota-to-even-out-supply

SINGAPORE - Buyers of commercial vehicles can expect less fluctuation in the supply of certificates of entitlement (COEs) for such vehicles, after the Land Transport Authority (LTA) revised the way it calculates the quota available for bidding.

The LTA now takes the average number of commercial vehicle registrations under the Early Turnover Scheme (ETS) from the previous four quarters, or 12 months, to calculate the COE supply for each three-month quota period, starting with the current quota for May to July 2023.

 

Previously, it used the number of ETS registrations from the previous three months.

The LTA told The Straits Times that the change “provides more stability to our COE supply and reduces the likelihood of ETS numbers exceeding deregistrations in a single quarter”.

There would have been zero commercial vehicle COEs available for tender from May to July 2023 if the LTA had not modified its method for calculating COE supply for this category. This is because the number of ETS registrations from January to March 2023 – used to calculate the COE supply for May to July – exceeded the number of scrapped commercial vehicles captured in the formula after taking away the contribution to Open category COE.

The number of ETS registrations was unusually high in March 2023, with 1,482 such registrations out of 2,512 recorded in the first three months of this year.

With the change, ETS registration figures will be recorded in the same way as vehicle deregistrations in the COE supply calculation. The LTA began using the average number of vehicles deregistered in the past four quarters to calculate COE supply starting with the quota for February to April 2023.

 

The number of commercial vehicle COEs available for tender is driven primarily by two components: the number of vehicles that were scrapped, which forms the basis of the upcoming COE supply, and ETS registrations, which is deducted from the deregistration figure.

Under the current policy, the supply of commercial vehicle COEs is allowed to grow by 0.25 per cent a year. This is set to remain until January 2025.

Under the ETS, the owner of an older commercial vehicle can switch to a new one with cleaner emissions by paying a discounted rate of the COE price instead of having to bid for a new one.

The exact amount payable depends on the existing vehicle model and the replacement model that will be registered under the scheme. The current iteration of ETS kicked in on April 1, 2023, and expires on March 31, 2025.

In 2021 and 2022, ETS registrations outnumbered commercial vehicle registrations using new COEs. The trend continued in the first three months of 2023, where 2,512 ETS registrations represented 86.03 per cent of the 2,920 commercial vehicle registrations for the period.

The dominance of the ETS route to register new commercial vehicles in the first quarter of 2023 may have been driven by the general shortage of commercial COEs available for tender when dealers were rushing to register vehicles before April 1, 2023.

The date was when incentives under the Commercial Vehicle Emissions Scheme were halved for some vehicles from $30,000 to $15,000. The ETS benefit was also reduced. In the case of light commercial vehicles, retiring an old van with Euro III emission levels for a new, lower emission model such as a Suzuki Every after the switchover would see the ETS incentive reduced from 45 per cent to 20 per cent.

A stricter emission test protocol also came into force.

 

Mr Neo Tiam Ting, director of Think One, which deals in commercial vehicles, said there was a big rush in March for ETS-eligible vehicles that can be used to register new vans before April 1. This has since subsided.

In the current three-month period till July, there is a monthly average of 137 commercial vehicle COEs available for tender. This was an increase of 59.3 per cent over the monthly average of 86 such COEs in the previous three months.

The price of commercial vehicle COEs has risen significantly, hitting a record high of $91,101 in March 2023. It was $48,889 in March 2022.

With the current elevated COE prices, the resale value of a used vehicle in the open market can be higher than the revised ETS incentive. This makes it difficult for motor traders to source ETS-eligible vehicles for buyers keen to grow their fleet.

Between 2013 and 2022, ETS has accounted for 63,449 commercial vehicle registrations, compared with the 61,866 units that were put on the road with new COEs in the same period.

In November 2022, the LTA and National Environment Agency announced that ETS for light commercial vehicles will end on March 31, 2025. The agencies said they would be looking at other means to encourage owners to switch out of older commercial vehicles and buses.

[Inlinefour]

golden goose laying platinum eggs 🙈🙉🙊

[Fitmugen]

They should release more commercial COEs. These vehicles generate most value for the economy. Professionals who need to travel can always take taxi

[Mkl22]

another brainless idea of the complicated ETS system has shot themselves in the foot!

 

only such shit can come from the infamous incompetence of LTA! can have 0 cat C for bidding.... 😁

 

"There would have been zero commercial vehicle COEs available for tender from May to July 2023 if the LTA had not modified its method for calculating COE supply for this category. This is because the number of ETS registrations from January to March 2023 – used to calculate the COE supply for May to July – exceeded the number of scrapped commercial vehicles captured in the formula after taking away the contribution to Open category COE.

[Arogab]

I will be over 55 when my current ride expires. If COE remains so high and I do not like to pay $100k to someone for just driving. I just forego lor. I just think the price is not justifiable. Just like Rental soaring is becoming a political issue. COE might have to be partly justified too. It will cause us Singaporeans to be divided as well

[Jamesc]

Why stability only means consistently high price?

Stability can also mean consistently low prices right?

Everyday all I hear is

Head they win, tails we lose.

We would like to win once in a while too!

Edited May 11, 2023 by Jamesc

[Picnic06-Biante15]

They are smart hor....... 

Increase Cat A & B (about 6000 COE) for the next quarter would mean extra earning of 600 million with current COE price of >$100k. 

The COE will not drop immediately but gradually and by then, next quarter coming. Cut number of COE ??? ...  

COE is that "Golden Goose" 

[Arogab]

They are telling us openly, they can tweak and tweak. Be it Motocycles, Commercial, blah blah blah. Haha

[Fitvip]

On 5/11/2023 at 12:04 PM, Arogab said:

They are telling us openly, they can tweak and tweak. Be it Motocycles, Commercial, blah blah blah. Haha

83 : 11

I thought the tweaks have been merged in the other COE thread!?

Edited May 11, 2023 by Fitvip

[Sdf4786k]

On 5/11/2023 at 9:21 AM, Fitmugen said:

They should release more commercial COEs. These vehicles generate most value for the economy. Professionals who need to travel can always take taxi

Not really .. if u Check out the number of increases for cute Honda commercial vans… 

[Arogab]

On 5/11/2023 at 11:09 AM, Fitvip said:

83 : 11

I thought the tweaks have been merged in the other COE thread!?

More to come. I also donno leh, we got COE thread and here @kobayashiGT start this one tweaking 

[zipping]

tweak to meet kpi?....kpi no gd, tweak again? tweat until kpi met? what hav we peasents got to say? LLST lor....

[Volvobrick]

On 5/11/2023 at 1:49 PM, zipping said:

tweak to meet kpi?....kpi no gd, tweak again? tweat until kpi met? what hav we peasents got to say? LLST lor....

Tweak because erections coming.... 

KPI is to maximise revenues. 

Economy grows mean more logistics means more vehicles needed. Unless delivery can be done via the broadband network. 3D printed lunch anyone? 

[Inlinefour]

On 5/11/2023 at 12:09 PM, Fitvip said:

83 : 11

I thought the tweaks have been merged in the other COE thread!?

too many pappies messed up the party 🙊🙉🙈

[mersaylee]

When a bitch has not enuf nipples to feed the many puppies...can always  try milk the cow for more fresh ones to feed the ever hungry pups 😁

[Daniu82]

Only tweak to their own benefit

[inlinesix]

On 5/11/2023 at 9:30 AM, Arogab said:

I will be over 55 when my current ride expires. If COE remains so high and I do not like to pay $100k to someone for just driving. I just forego lor. I just think the price is not justifiable. Just like Rental soaring is becoming a political issue. COE might have to be partly justified too. It will cause us Singaporeans to be divided as well

I believe you

🤭

[BanCoe]

@Mustank hapi hapi