Car plate prices fall back below 80,000 yuan mark

Shanghai car plate prices fell for the third consecutive month at yesterday's auction, as curbing measures continued to cool speculation.

The average successful bid for a Shanghai car plate dropped to 77,823 yuan (US$12,693), down 2,980 yuan from last month, while the lowest price shed 3,100 yuan to 77,600 yuan, according to Shanghai International Commodity Auction Co.

These falls saw Shanghai car plate prices dip below the 80,000 yuan psychological benchmark, which was first surpassed in February.

Price ceiling

In March, prices reached a record high of more than 90,000 yuan, after soaring 32.5 percent in the first three months of this year - more than for all of last year.

To stop this market hype that turned car plates into "investment targets," the government introduced a price ceiling mechanism in April for the first round of bidding.

This month, the upward limit was set at 77,300 yuan, based on the weighted average of average successful bids from last November to March, down 2,600 yuan from last month's maximum.

"The new bidding policy is part of the reason for the downward correction," said Shanghai car dealer Xiao Yan.

"There's less chance of overbidding now and a less tense market sentiment."

A crackdown on speculative secondhand car plate trading has also played a role, as this provides a reference point for auction trends, Xiao added.

Since March's auction, old city car plates can no longer sell for higher than the latest average price for a new one.

New car plate prices have now nosedived more than 13,000 yuan in three months.

Car plate supplies, which were once increased to 11,000 to ease the market sentiment, have been back to the usual level of 9,000 since May.

The number of auction participants continued to drop, down 742 from last month to 21,482 yesterday. The rate of successful bids rose to 41.9 percent from 40.5 percent.

Would-be car buyer Lynn Wang said she is confident prices will continue this downward track for some time, though with rebounds.

"There's a chance for me to get a car plate this year at a bargain price," said Wang.

In March, Vice Mayor Jiang Ping said the government is determined to bring car plate prices back to normal levels and will use back-up plans should existing policies fail.

Policies available for roll-out include: organizing separate auctions for private and corporate bidders as the latter are less price-sensitive; and including second-hand car plate trading in the bidding system for new ones to make it harder for scalpers to cash in.