Measures to Better Regulate Fluctuations in COE Prices

Mr Muhamad Faisal Bin Abdul Manap asked the Minister for Transport in view of the recent all-time high COE price for motorcycles (a) whether there are plans to mitigate the situation; and (b) whether there will be any review of the current motorcycle COE system so as to better regulate the COE prices.

The Certificate of Entitlement (COE) is a market-based mechanism to allocate limited vehicle supply. The quota premium for COEs is thus determined by market forces of supply and demand.

The overall supply of Category D COEs has remained stable since 2018. This is as we have ceased the contribution of Category D to Category E quota in 2017. Also, the vehicle growth rate for motorcycles, like for cars, has been 0% since 2018 in line with our car-lite policy. Therefore, at each bidding cycle, the supply of motorcycle COEs available is simply based on the number of motorcycles deregistered in the previous quarter.

Since the resumption of COE bidding after motor showrooms and dealerships re-opened, Category D COE prices have increased, but there is so far no evidence of speculation. The vast majority of COEs at these prices have been taken up and used to register motorcycles. The number of utilised temporary COEs has been high at approximately 99%, as compared to the historical average of about 91%.

Motorcycles are also subject to much lower Additional Registration Fees, road taxes and ERP charges compared to cars. We will continue to monitor the situation and study if any further measures ought to be taken.