Just announced by Transport Minister Raymond Lim, the number of COE available in the coming quota year will be slashed by 24%. Ouch. That is a humongous cut. I guess the government has had enough with $2 and $200 COEs. Time to take action. Particularly with the gloomy economic climate, where fewer new cars are expected to be purchased, something really drastic had to be done to prop up the COE prices.

The new quota year starts in May. The economy may be bad, but a 24% cut in COE numbers is really significant. I’d expect that COE prices will go up, and as a result, car prices will have to go up too. From now till the new quota year, we might start to see increased new car sales. People who are already looking will probably want to commit now rather than wait a few months later.