By Zaihan Mohamed Yusof
WHEN the latest bidding results for certificates of entitlement (COEs) were released last week, the big question on the minds of many riders here was this: Will I be able to afford a motorcycle?
With the premium for COEs in category D (motorcycles) going up by $603 to $2,604 - a 14-year high - riders like university student Titus Yong are worried they may be priced out of the market for smaller bikes, especially those below 200cc. These make up roughly 75 per cent of the motorcycles here.
Said Mr Yong, 24: "It doesn't make sense for me to get a small bike because the COE is now half the cost (of a small motorcycle). Now, I will wait and see. Maybe getting a bigger (capacity) motorcycle would be more worth it."
This time last year, premiums hovered near the $1,000 mark. Back then, a rider could buy a small bike for $5,000 to $6,000.
With the current COE premiums, small bikes are expected to cost between $6,300 and $7,000.
Take the Yamaha Spark T135. At the beginning of this year, it cost about $5,100 (inclusive of COE and road tax). Now, it is priced around $6,300.
Singapore Motor Cycle Trade Association secretary-general Tony Yeo attributes the rising premiums to the shrinking supply of COEs and increased demand from bikers.
The monthly quota for motorbikes for August last year to January this year was 664 - 63 less than that for October 2009 to March last year.
Mr Yeo said: " It (the current COE premium) is too much. We can expect premiums to go up again and maybe cool off in the last quarter."
The increase in demand for bikes could also be fuelled by ex-bikers joining the ranks after COE premiums for cars above 1,600cc went past the $60,000 mark.
Added Mr Yeo: "These ex-bikers upgraded when car COEs were relatively cheaper and they started having families. I do not have figures, but I suspect that they're downgrading now because of the (high) cost of owning cars.
"But drivers who have never owned a motorcycle will never cross over because of the perception that riding is dangerous."
How high can motorbike COE premiums go?
In November 1995, motorbike COE premiums hit $4,202.
As COE premiums rise, some motorcycle distributors here are already feeling the effect. Almost all the Japanese bike manufacturers suffered a drop in new motorcycle registrations.
Yamaha's annual registration of 3,953 in 2009 dropped to 3,834 last year. In 2006, there were 4,547 Yamaha bikes registered here.
Suzuki experienced a similar decline. In 2009, there were 541 Suzuki motorbikes registered, while last year there were only 356.
A Yamaha distributor, Mr Hoe Boon Meng, 62, said that while business is suffering, distributors can still survive.
Mr Hoe, general manager of Hong Leong Corporation Holding, said: "We will lose some riders, but we will be able to maintain some loyalty in the business sectors like food delivery and courier companies.
"Even with the COE (price) increases, owning a motorcycle is still cheaper than owning a car."
Mr Hoe added: "This is the time when bike dealers have to be creative to attract business from a shrinking market. Some will offer innovative loan options or discounts, while others may offer vouchers or free servicing."