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Car plate costs continue to rise

CAR plate prices in Shanghai continued to climb this month despite the available quota hitting a new record high.

The average price for a car license rose to 29,100 yuan (US$4,254) for May, an increase of 376 yuan from the previous month, the organizer said yesterday.

The lowest successful price also rose, edging up by 200 yuan to 28,500 yuan.

A record for the year of more than 7,200 car plates were auctioned, about 700 more than last month. The monthly auction attracted 16,471 bidders, 1,183 fewer than April.

"A higher number of car plates does not always mean lower tag prices," said a Volkswagen dealer surnamed Fan. "The auction price is more related to robust auto sales that generate heated market demand."

China's vehicle sales rose 25 percent in April from a year earlier to a record high of 1.15 million units nationwide.

The sizzling sales are mainly driven by small engine capacity passenger cars that attract tax incentives.

Market recovery could also be linked to last month's Auto Shanghai 2009 exhibition, where aggressive launching of new models drew huge crowds from Shanghai and nearby cities.

"Many consumers have bought their cars and are eager to get the plates," Fan said.

The higher prices also follow Shanghai government's confirmation that the license plate auction would not be abolished before next year's World Expo.

The Shanghai Development and Reform Commission believes quota controls will be necessary to control higher urban traffic pressure due to the number of city improvement works under way.


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