SINGAPORE — Crowds thronged the car showrooms on Thursday (July 5), a day after Certificate of Entitlement (COE) premiums for cars fell to their lowest in eight years. Some dealers also slashed prices by offering discounts of between S$2,000 and S$6,000 for Hyundai and Mitsubishi cars in the hopes of attracting more buyers over the weekend.

At the Hyundai showroom, S$5,000 discounts were offered for small cars under Category A (up to 1600cc and engine power not exceeding 97kW) from Thursday to Sunday, while S$3,000 was slashed off prices of Category B (above 1600cc or 97kW) or cars.

Similar discounts were also dished out by other dealers, as Mitsubishi put out a S$6,000 discount for its Attrage range from Thursday to Sunday, as well as S$2,000 discounts for its Category B cars in the same period.

When TODAY visited car showrooms at Leng Kee on Thursday afternoon, salesmen were busy entertaining queries from the lunchtime crowd.

"There are about 50 per cent more people here compared to a normal Thursday," said Ms Agnes Low, a sales consultant at Cycle and Carriage's Mitsubishi showroom.

At Kah Motor's Honda showroom, a salesman who declined to be named said that he had seen 20 per cent more customers than usual for a weekday morning.

Footfall was also visibly higher at Komoco Motors' Hyundai showroom, hitting about 30 visitors from its opening till lunchtime. This was more than double the usual of between 10 and 13 visitors, said a salesman.

Car dealers told TODAY that while they had expected a dip in COE prices, many were surprised by the steep decline, and they expect consumer demand to go up as a result.

Mr Neo Tiam Ting, president of the Automobile Importer and Exporter Association (Singapore) said he was more surprised by the drop in COE prices for Category A cars.

"We expected COE prices for Cat A cars to drop by about S$5,000 because of the new PM (particulate matter) criteria added to the VES (Vehicular Emissions Scheme) on July 1, but the S$9,000 drop (for Cat A) was unexpected," he said.

Cartimes' managing director Eddie Loo, who was also caught off guard by the steep decline in Category A cars, said that the drop in COE prices for that category would be negligible, as most of these cars would have a surcharge of about S$10,000 due to the Vehicular Emissions Scheme (VES).

"The S$9,000 drop (in Cat A) prices is just a readjustment. It doesn't mean that consumers (buying Cat A cars) will pay less after the S$9,000 decline," said Mr Loo.

"By this weekend, we will know how the market will react towards the fall in COE prices, but I think (consumer reaction) will be very positive."

He added that Cartimes could cut prices for Category B cars, which are not affected by the VES, such as the Honda Freed, Toyota Noah and Toyota Camry.

Mr Jeremy Soh, honorary secretary of the Singapore Vehicle Traders Association, expects car showrooms to be "pretty packed" this weekend.

He said: "Car sales have been pretty slow for the past few weeks as everyone is holding back. Consumers are looking to see where car prices are heading, and dealers also don't have much new stock on hand.

"Dealers are also trying to gauge the market demand going forward with the new VES."

Mr Raymond Tang, managing director of Yong Lee Seng Motor, said: "Many people are still adopting a "look-see" approach (to buying cars) because of the new VES."

At the start of the year, the Government rolled out VES to encourage car buyers to choose vehicles that have lower emissions of pollutants.

From July 1, particulate matter was included in the list of five pollutants measured in the scheme, under which tax rebates or surcharges are given for new cars based on the amount of tailpipe pollutants released. With particulate matter in the mix, more cars are likely to have tax surcharges.

Car buyer Louis Thng, 32, said that he had been waiting for COE prices to drop.

"I waited quite a while, and I will be getting a Hyundai Elantra Elite this Saturday," said the 32-year-old consultant.

It is a good time for car buyers to make their purchases now, said Mr Samuel Yong, marketing director of car dealer Inchcape. He added: "I expect a COE price correction the next round. Brands may have to pass on the VES impact in the longer term."