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Car plate prices drop to this year’s lowest
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SHANGHAI’S car plate prices fell for the fifth consecutive month at yesterday’s auction to the lowest level this year.
This followed a further lowering of the price ceiling for the first round of bidding.
The average price of a Shanghai car plate dropped to 74,939 yuan (US$12,252), down 1,526 yuan from last month, while the lowest winning bid was down 1,600 yuan to 74,700 yuan, said the Shanghai International Commodity Auction Co.
The falls were less steep than at the first few auctions after the price ceiling mechanism was introduced in April.
But city officials will be heartened to see the market following a steady downward trend.
This month, the first-round ceiling was set at 74,100 yuan, based on the average prices from last September to March.
That was 1,300 yuan down from last month’s ceiling, compared to reductions of 1,900 yuan in July, 2,600 in June and 3,700 yuan in May.
In March — the month before the ceiling was introduced — prices reached a record high of more than 90,000 yuan.
“The price ceiling should be given some credit for dragging the price down more than 16,000 yuan from its record high in March,” said Eddie Zhang, a car dealer in Shanghai.
The price ceiling mechanism also tackles speculation.
A new rule prohibiting a secondhand car plate being sold for more than the latest average price for a new one makes it hard for scalpers to cash in.
Determined to cool down the market through the market’s own forces, the municipal government said earlier this month that the price ceiling will no longer be a norm.
Starting from October, it will only be triggered by substantial price spikes.
A rise of between 3 and 6 percent will result in a limit being imposed on the first round of bidding the next month.
An increase of more than 6 percent price will see a ceiling set for two months.
Ceilings will be based on the average winning bids in the three months before the hike.
Following the announcement of this new bidding rule, the number of bidders at yesterday’s auction rose slightly from last month to 22,650.
The supply of plates remained at 9,000, while bidding was condensed from one and a half hours to an hour.
Zhang said yesterday’s increased number of bidders is understandable as buyers may fear a price rebound once the price ceiling is removed.
But another wave of market hype is unlikely, he said.
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