COE Quota reductions for 2008

The doom and gloom situation forecasted by many in the industry due to COE quota reductions turned out to be a storm in a teacup after the official reduction was announced on the LTA website.

The annual quota of Certificates of Entitlement (COEs) for Quota Year 2008 (for the period May 2008 to April 2009) will be set at 115,946, as compared to the previous Quota Year (May 2007 to April 2008)of 125353.

Overall the reduction of Quota wasn't as bad as feared, and if fact if one does the sums, there is only a Quota cut of 8%!

A table derived from LTA's official web site explains the facts and figures more clearly.

VEHICLE QUOTA SYSTEM QUOTA FOR MAY 2008 - APRIL 2009
VEHICLE CATEGORY	CATEGORY A Cars (1600cc and below) & Taxis	CATEGORY B Cars (1601cc and above)	CATEGORY C Goods Vehicles & Buses	CATEGORY D Motor-Cycles	CATEGORY E Open*	TOTAL
Vehicle Population as at 31 Dec 2007	329,299**	209,841	146,889	143,524	-	829,553
Net Increase Allowed [ 3% x vehicle population]	9,879	6,295	4,407	4,306	-	24,887
Provisions for Replacement	34,500	19,200	7,800	7,350	22,950	91,800
Expired COEs carried over from 2007	19	18	12	260	2	311
Adjustment***	4,449	863	-3,170	-1,232	-1,962	-1,052
Total Quota for May 2008 to April 2009	51,803	26,995	9,471	11,000	26,084	125,353****

Note:
*. Category E receives 25% of the estimated de-registrations in 2008 and adjustment due to under and over-estimation of de-registration in previous years from Categories A-D.
**. Category A population includes taxis.
***. This adjustment takes into account the adjustments made during the 2007 mid-quota year review, which were introduced in the tender exercises from October 07 to March 08.
***. The figure incorporates the reduction of 1,668 COEs after the 2007 mid-quota year review. The originally announced quota was 127,021.

CATEGORY A Cars(1600cc and below) & Taxis
- quota from may 2007 to april 2008 = 51,803
- quota from may 2008 to april 2009 = 48,847 ,therefore it computes a reduction of 2956 units

CATEGORY B Cars(1601cc and above)
- quota from may 2007 to april 2008 = 26,995
- quota from may 2008 to april 2009 = 26,376, therefore it computes a reduction of 619 units

CATEGORY E Open
- quota from may 2007 to april 2008 = 26,084
- quota from may 2008 to april 2009 = 20,990, therefore it computes a reduction of 5094 units

Based on these figures,
(48847+26376+20990) / (51803+26995+26084) = 96213 / 104882 = 0.9173
100% - 91.73%= 8.27%

This only means one thing: Good news for car buyers as a stable amount of COES ensures the COE price does not skyrocket and hurt the consumer's pockets.

So what are you waiting for? Go and purchase that family MPV that you need so badly!