Some motor traders, academics suggest merging COE car categories; others propose targeted refinements

Motor traders and academics agree that the COE system needs review but are split on merging car categories A and B in Singapore. Read more at straitstimes.com.

SINGAPORE - Some motor traders and academics have suggested merging Categories A and B of the certificate of entitlement (COE) system to keep it relevant, while others prefer retaining them as they are, with more targeted refinements.

Observers interviewed by The Straits Times broadly agreed that the COE system needs a review. They pointed out that the current iteration lags behind market developments, including the rising dominance of electric vehicles (EVs).

Some proposed using the cost of a car at the point of import into Singapore – its open market value (OMV) – to determine whether it is a mass-market or higher-end model. One suggested adding the buyer’s residence type to the mix to better protect the interests of more budget-conscious consumers from those shopping for more premium options.

Acting Transport Minister Jeffrey Siow, during the debate on his ministry’s budget on March 4, announced a review of the COE system to improve the categorisation of cars. Slated to be completed by the end of 2026, the review will see the Land Transport Authority (LTA) gathering views from the motor industry, academics and motorists.

Mr Siow believes there is merit to maintaining a distinction between mass-market and higher-end cars, and said the review will have to determine a form of categorisation that is a “little bit more stable in the longer term”.

It follows calls by MPs who flagged the anomaly in February’s second COE exercise, where the Category A premium for mass-market cars exceeded that of Category B, meant for higher-end cars.