THE COE MARKET took a tumble this time around, at least where certificates for cars were concerned. While COEs for motorcycles and commercial vehicles went up, Category A certificates plunged $1,898 to $10,003.

The COE for cars above 1.6-litres (Category B) sank by $1,582 to close at $11,519, while the Open Category COE (valid for any kind of vehicle) dropped $899 to end bidding at $12,402.

While the drop itself was widely anticipated by the motor trade, what caught some members by surprise was the magnitude of the fall. "I expected a drop, but not a $2,000 drop," said one sales manager we spoke to, about Cat A's plunge. "I was thinking it would maybe fall $1,000 or so."

That showroom traffic has been slowing down is undeniable, and numerous dealers have complained to CarBuyer that buyers just don't seem to be biting these days. But is the situation actually worse than dealers realise?

Let's first consider the usual factors listed by dealers lately to explain the slowdown in customer interest. There's a lack of a genuine blockbuster new car right now, with nothing in sight to fill that role perhaps until the new Toyota Camry makes its debut at the tail end of the year.

It's hard to take that explanation too seriously, however, when some cars have clearly been winning people over. The Lexus IS 250 is generating a serious buzz amongst exec car buyers who know a good deal when they see one, and the Honda Civic has been so popular that its waiting list extends to December.

One or two motor traders have also suggested to us that buyers are getting spooked by high fuel prices. True, it's scary when a litre of premium unleaded lists for more than $2. But buyers are probably more likely to switch their choices to fuel-sipping cars when petrol is pricey, rather than giving up the thought of car ownership altogether.

Higher interest rates? That is probably a genuine concern for many would-be drivers, but aren't today's low car prices enough to cancel out - or at least mitigate - the effects of pricier borrowing? Better to pay 4.25 percent on a $50,000 loan than 2.25 percent for a $60,000 loan, if you ask us.

If anything explains the current sudden slowdown, it's perhaps the fact that the early part of the year was unusually strong for the trade. From January through March (April figures were unavailable as we went to print), new car and taxi registrations totalled 32,688 units, according to figures from the Land Transport Authority.

That's something of a record number, and exceeds the registrations for the same period last year by over 7 percent. And 2005, remember, was a bumper year for cars.

With that much activity early in the year, a quiet period was bound to follow. So perhaps the car trade now finds itself in a position akin to that of a restaurant which, having served lunch to an unusually large crowd, now finds itself with few takers for high tea.

Not that the trade is taking things lying down. "We should get a fair response," said the sales manager we spoke to, when we asked if the COE market's plummet would stir up demand.

Indeed, a near-$2,000 price fall might draw shoppers to showrooms, but some dealers are taking to opportunity to give buyers something to really think about. Cycle & Carriage slashed $4,000 off the prices for certain Kia Rio models, for instance, while over at Tan Chong Motor Sales, some Nissan are now cheaper by as much as $6,000.

With that sort of pricing aggression going on, high tea might just draw a crowd, after all.

Category A May 1st tender
52-week high: $18,101
52-week low: $8,009
Quota: 2,223
Bids: 2,426

DEMAND FOR THIS COE is clearly on the wane, with just 2,246 bids recorded this round. Two weeks ago, there were 2,762 bidders.

It's likely that this week's result reflects a truer picture of demand for cars, with April's bids containing a few spillover buyers from the busy start to the year. Given the size of the drop, however, as well as the disproportionately high price cuts some dealers have responded with, the market could rebound slightly next time around.

Category B May 1st tender
52-week high: $17,701
52-week low: $9,001
Quota: 1,089
Bids: 1,293

CAT B PREMIUMS fell by $1,582, and this represents a pretty significant drop, given that demand didn't seem all that much lower than two weeks ago, with 1,293 people vying for 1,089 certificates. Last time out it was just six people more, fighting over three certificates fewer.

If April did exhaust spillover buyers from earlier in the year, perhaps dealers no longer had to bid as aggressively to be sure of securing COEs for orders taken a few months ago.

Category E May 1st tender
52-week high: $18,000
52-week low: $9,275
Quota: 1,118
Bids: 1,475

AS ALWAYS, THE Open Cat certificate provided the most food for thought. At $12,402, it's now within striking distance of the COE for buses and commercial vehicles ($12,101).

With September bringing in stricter Euro 4 emissions standards for diesel vehicles, some dealers have been eager to clear their older, non-compliant stock, and as long as the two categories remain closely priced, Cat E certificates could be switched to commercial vehicles. If so, expect this COE to stay in demand for a while.