1. In the one year since the re-categorisation of Category (Cat) A and B cars in February 20141, there has been a decrease in the median Open Market Value (OMV) of cars registered in Cat A, and a greater proportion of cars with lower OMV in Cat A, as compared to before re-categorisation.
2. The re-categorisation was implemented to ensure that Cat A continues to cater mainly to mass-market car buyers, and stem the rising proportion of higher-end cars appearing in Cat A in recent years. (Bringing down Cat A COE prices was not the aim.)
Sustained decrease of about 27% in median OMV
3. The median OMV of Cat A cars has remained consistently below $20,000 in the one-year period since February 2014. Comparing the six-month period before the re-categorisation (August 2013 to January 2014)2 with the corresponding six-month period after (August 2014 to January 2015), the median OMV for cars registered with COEs obtained in the latter period has decreased by 27%, from $26,147 to $19,143.
Proportion of lower OMV cars registered in Cat A has increased
4. Correspondingly, the percentage of cars with OMV at or below $15,000 has increased from 8% to 12% of all Cat A registrations; those with OMV at or below $20,000 has increased from 26% to 70%; and those with OMV at or below $25,000 has increased from 43% to 80%. Please refer to Table 13.
Table 1: Cars registered in Cat A using COEs obtained
before and after implementation of new categorisation criteria
|
| Cars registered in Cat A using COEs obtained in: | |
| August 2013 – January 2014 | August 2014 – January 2015 | |
| Number of cars registered | 4,245 | 9,965 |
| Median OMV | $26,147 | $19,143 |
| Percentage of cars with | 8% | 12% |
| Percentage of cars with | 26% | 70% |
| Percentage of cars with | 43% | 80% |
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1 With the re-categorisation, cars must meet two criteria to qualify for registration under Cat A: (i) the previous criterion that the engine capacity should not exceed 1,600cc, and (ii) a new criterion that the engine power should not exceed 97kW (equivalent to about 130bhp). This is effective for all cars registered using Certificates of Entitlement (COEs) obtained from the February 2014 first open bidding exercise onwards.
2 There were several policy changes that affected the car market in the early half of 2013, such as the loan financing restrictions and the tiered Additional Registration Fee structure. For a cleaner analysis, a more stable period in the six months prior to the implementation of re-categorisation was used as a basis for comparison instead of the full year prior.
3 These figures may change slightly as vehicle buyers have up to six months to register a car upon securing a COE.
