Plate prices plunge, more curbs on the way

Curbing measures lowered Shanghai's car plate prices for the fourth consecutive month at Saturday's auction, the last before new bidding policies are introduced next month.

The average winning bid for a Shanghai car plate fell to 76,465 yuan (US$12,454), down 1,358 yuan from last month, while the lowest price dropped 1,300 yuan to 76,300 yuan, said the Shanghai International Commodity Auction Co.

These falls were more of a "dip," following the "nosedives" of the past three months.

Prices have plunged more than 13,000 yuan from March's record high of above 90,000 yuan.

The price ceiling for first round bids fell less steeply this month. The limit was 75,400 yuan, based on the weighted average of successful bids from October to February - down 1,900 yuan from last month's maximum.

That compares to a drop of 2,600 yuan in June, and a fall of 3,700 yuan in May from April.

That was when the municipal government first introduced this bidding mechanism as part of intensified efforts to cool down the car plate market.

"You can see the things they are doing here are really working," said Eddie Zhang, a Shanghai car dealer.

There is less over-bidding under the auction price ceiling, and less room for speculation under the new pricing system for the second-hand car plate market, Zhang added.

Since March, second-hand Shanghai car plates can no longer sell more than the latest average for a new one.

This has stopped the second-hand market driving upward trends of auction prices and leaves scalpers with fewer opportunities.

The city government is determined to bring prices down further and has said it will introduce new policies for next month - though without specifying what these would be.

Perhaps due of this uncertainty, the number of bidders at yesterday's auction rose for the first time in three months - up to 21,811 from 21,482 in June.

The number of plates up for auction remained at 9,000.

But the prospect of new measures persuaded some would-be bidders to wait and see.

"I expect to see prices drop again next month," said motorist Lynn Wang. She believes the new policies could be back-up measures announced in March.

Those include 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 to make it harder for scalpers to cash in.