Utilisation Rate for Category D COEs and Proportion of Successful Bids by Commercial Entities and Individual Buyers
Ministry of TransportSpeakers
Summary
This question concerns the utilization of Category D COEs and the potential for a fixed individual quota, as raised by Mr Muhamad Faisal Bin Abdul Manap. Minister S Iswaran reported a 99.9% utilization rate for early 2021 TCOEs and noted that while 96% of bids are by commercial entities, most serve individual registrations. He explained that a separate quota would be arbitrary and likely increase market volatility and prices. Minister S Iswaran attributed high costs to strong demand rather than the bidding structure and stated the Ministry is monitoring the impact on vocational riders. He assured the House that appropriate measures will be taken if the situation warrants intervention.
Transcript
121 Mr Muhamad Faisal Bin Abdul Manap asked the Minister for Transport (a) what is the utilisation rate for Category D COEs from January to September 2021; (b) what percentage of successful Category D COE bids are made by commercial entities and individual buyers respectively; and (c) what consideration has the Ministry given to setting a fixed quota of COEs solely for individual buyers to bid.
Mr S Iswaran: For temporary Certificates of Entitlement (TCOEs) secured from January to April 2021, which have since expired, the utilisation rate is 99.9%. The TCOEs secured after April 2021 have not expired since they have a validity of six months.
While 96% of the successful Category D COE bids are made by commercial entities, including motor dealers, most of these COEs are subsequently used to register motorcycles belonging to individuals. This is because many owners prefer to obtain their COEs through their dealers. Doing so allows the motorcycle buyers to benefit from being able to get their motorcycles immediately, by using the TCOEs that the dealer has already secured.
The high TCOE utilisation rate suggests that the higher Category D COE prices are a result of higher demand for motorcycles. There is no evidence that it is caused by allowing both dealers and individuals to bid. To set a quota for individuals would be arbitrary and the smaller quotas in the COE sub-categories will likely result in greater market volatility and potential increases in COE prices.
The Ministry understands the concerns on the impact of COE prices on motorcycle owners who ride for a living. I would like to assure the House that we are monitoring this situation closely and will take the appropriate measures, if warranted.