Shanghai allows 2,000 more car at auction to lower sky-high prices

Shanghai will increase the number of car plates at the upcoming monthly auction by 2,000 to 11,000 as part of efforts to rein in surging plate prices, authorities said yesterday.

Other measures include reserving new car plates for new cars only and limiting sales of second-hand cars with local plates.

The city government said it has decided on the quota increase given current car price discounts, the increase in car plate demand as the May Day holiday travel period nears, and the increase in car plate prices.

The 9,000 quota has remained unchanged for months.

The policy of reserving new car plates for new cars only will take effect on April 20, the day of the auction, the government said. The measure may further push scalpers out of the game, Shanghai Vice Mayor Jiang Ping said earlier.

The third solution, also effective on April 20, says second-hand cars with Shanghai plates cannot be resold within a year to curb speculation.

The city said it would further improve the car plate auction management system and auction procedures.

The latest measures came after earlier policies to cool down car plate prices in Shanghai achieved little effect as prices at March's auction exceeded 90,000 yuan (US$14,490) for the first time. It was the ninth consecutive month of hitting a record high.

At the auction, the average successful bid for a Shanghai car plate soared to 91,898 yuan - up 8,327 yuan from February, making the plate almost three times as expensive as the cheapest car on the market.

City car plate prices have soared 32.5 percent in just three months.

In March, a new policy took effect, prohibiting second-hand car plates being sold for more than the latest average price for a new one.

Some potential buyers said they were scared away by the car plate price.

"I would rather buy a car plate of other provinces because it is too crazy to buy a little metal with almost my whole year's savings," said local resident Linda Wang, who recently bought a car and a parking space at her residential complex.

She said she will probably consider buying a local plate next month if the new policies prove to be effective in this month's auction.

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