Shanghai car plate prices rise at year's last auction

Shanghai's car plate prices rebounded slightly yesterday at the year's last auction before a rigid price ceiling mechanism comes into force next month.

The average price of a Shanghai license plate rose to 76,093 yuan (US$12,532), up 376 yuan from last month. The lowest winning bid increased 500 yuan to 76,000 yuan, the Shanghai International Commodity Auction Co said.

The price went up moderately with the number of bidders which increased 3.7 percent to 39,625.

It was the second price hike since April when the price ceiling mechanism was unveiled to cool down the market hype.

Just like last month, the auction had an upward limit of 74,900 yuan — the weighted average of average prices in September, August and July — imposed on the first-round bids and offered 8,500 car plates for sales.

The two-month imposition of the same limit was caused by a more than 6 percent price hike in October, the first month when the price ceiling mechanism experimented with a flexible mode, which officially ends this month.

Starting from next month, a more rigid price ceiling mechanism will come into effect.

The city government has announced a unified 72,600 yuan ceiling for car plate auctions throughout 2014.

The price ceiling mechanism, which successfully brought down the Shanghai car plate prices from its record high of more than 90,000 yuan in March, has proved effective in leading market expectations.

Under its guidance, the average prices often ended up a little above the upward limit for first-round bids, which are used as a gauge for second-round bids.

By fixing the upward limit, the government may be able to keep the price in a predictable range, said Eddie Zhang, a car dealer in Shanghai. "The price trend is largely determined by people's expectations of it. If their expectations are stable, then there won't be any big fluctuations on the market."

But considering there are some new auction factors to be taken into consideration, it will take some time for the new expectations to build up, he added.

Though the total number of car plates up for sale next year is set at 100,000 — almost the same as this year — the monthly supply was specified well ahead of time for the first time.

In January, April and September, 9,000 plates each will be sold ahead of the holiday demand, and about 8,000 plates for the rest of the year.