COE PRICES ALL went up this round but there's been no cause for celebration in the trade. It's business as usual as far as the dealers CarBuyer spoke to were concerned.

"It's just the three week break," says one sales manager, "other than that there's been nothing else, really."

COE bidding rounds take place every first and third Wednesday of the month. Every so often, we get five Mondays in a month, which usually means an extra week for dealers to collect orders before the next round of bidding starts.

In times of robust demand, sustained buyer interest over typical three week breaks tends to make prices jump fairly dramatically. For this round, premiums did go up but in distinctly lacklustre fashion.

The product manager for a major Japanese brand confirmed that business has been slow. "We're starting to clear our waiting lists because fresh orders don't seem to be coming in," he lamented.

Cat A prices registered the largest increase, gaining $1,102 on the back of an extra 215 orders over the last round. Cat B premiums inched upwards by $399, a barely noticeable gain, while Cat E prices managed to fare the worst, going up by a mere $283.

If nothing else, this round of bidding clearly illustrates what dealers have been saying for the longest time, that the market is saturated and only dramatic price dips or drastic changes in the tax structure are going to spur any interest.

That said, Cat A activity does seem to confirm the fact that it's really a first-time buyer's market. "Big cars, especially, don't seem to be moving," says the product manager. "So what's left? The bottom end of the market. But on the whole it's been very quiet."

Borneo Motors, the local Toyota and Lexus dealer, even cut prices on some popular models like the Vios and Altis by $1,000, basically normalising prices for the return to the two week bidding cycle. In other words, it does seem like the trade's biggest COE player expects the current lukewarm situation to continue.

Still, as long as Cat A cars maintain their record low prices, it appears that dealers are reasonably assured of attracting a steady trickle of new car owners into their showrooms.

The marginal increase of Cat B premiums also reinforces our product manager's sentiments, or the notion that playing to the replacement car market is pretty much an exercise in flogging a dead horse. Cars like the new Honda Civic and Lexus IS have remained steady sellers, but these still move in relatively small volumes. Too small to have any major effect on prices.

With Cat B in a relative stupor, it's more likely that any Cat E price movement has been due to some spillover from Cat A. Cat E's close price parity with that of Cat A's also suggests sustained Cat A activity. Traditionally used for the immediate registrations of Cat B cars, Cat E has also in recent times served as a proxy for Cat A buyers who opt to have their cars as soon as possible.

With nothing fantastically exciting on the new car radar, at least not until replacement models of old stalwarts like the Toyota Camry appear here later in the year, the COE market looks to continue shuffling along.

That said, the effects of this quota year's reduced supply of COEs should also increasingly make their presence felt. But since the only major group of people buying are first timers, they'll be the first to vanish if prices inch past their comfort levels. Which currently seems to be about the $10,000 to $12,000 range.

The outlook for the next round of bidding? Downward price revisions by dealers like Borneo might help prop the market up, but considering how slow things seem lately, and factoring in the return to a two week bidding cycle, expect prices to dip.

Category A June 1st tender
52-week high: $17,481
52-week low: $8,009
Quota: 2,217
Bids: 2,688

CAT A PREMIUMS registered the largest upswing, closing $1,102 higher. The number of bids went up, too, by 215. Not so hot, considering that dealers had a full extra week to collect orders. Activity in this Cat does point to sustained first time buyer interest, as well as possibly owners downgrading to smaller cars.

Toyota distributor Borneo Motors cut prices on Cat A models like the Altis and Vios by $1,000, indicating that the company doesn't see prices for this round to be anything more that the result of a three week bounce.

Category B June 1st tender
52-week high: $16,889
52-week low: $9,001
Quota: 1,096
Bids: 1,426

A $399 INCREASE was all Cat B premiums could muster, even after three weeks' worth of order taking. The Cat B segment traditionally comprises the replacement car market, but with what seems to be a large pool of existing Cat B car owners in a state of negative equity (where the value of their cars is less than the outstanding portion of their loans), the value of Cat B premiums has taken a significant hit.

The new Honda Civic and Lexus IS continue to sell steadily, but overall numbers are relatively small and don't seem to have much of an effect on premiums. Next round, expect a dip.

Category E June 1st tender
52-week high: $18,200
52-week low: $9,275
Quota: 1,119
Bids: 1,933

CAT E PREMIUMS recorded the tiniest spike, a $283 increase. The quota for this round of bidding fell by 57 pieces, and the number of bids jumped by 363. The bid ratio (the number of bids divided by the quota) actually went up to 1.72 from last round's 1.33.

However, the relatively small increase in premiums indicates a high percentage of non-quality bids. As with the other Cats, don't expect very much activity for the next round.