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February 24, 2013

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Home » Metro » Public Services

Pre-New Year spree sends car plate prices to new high

FRENZIED car buying before Chinese New Year helped push Shanghai plate prices beyond 80,000 yuan (US$12,832) for the first time yesterday.

In the eighth consecutive month of record highs, the average price for a Shanghai car plate shot up to 83,571 yuan - 8,239 yuan more than January.

The lowest winning bid surged 8,300 yuan on last month's figure to 83,300 yuan, continuing four straight months of rises, Shanghai Commodity International Auction Co said.

The city made 9,000 car plates available for this month's auction, the same as January and the lowest number since last April.

But the number of bidders rose 18 percent on last month to 24,651. The percentage of successful bids fell from 43.2 percent to 36.5 percent.

Shanghai car dealer Eddie Zhang said the increased competition for plates was partly a knock-on effect of the customary car buying craze in the weeks before the Chinese New Year holidays, which fell this month.

In January, China's passenger car sales soared 48.7 percent from a year earlier in the biggest jump in years.

In 2012, Chinese New Year fell on January, so many dealerships were closed for the holiday.

With plate prices showing no sign of cooling, new car owners were prepared to bid high in an effort to secure one this time round, said Zhang.

"As there are strong expectations of continued price hikes, it's natural that new car owners were so eager to get a car plate that they overbid," said the dealer.

And it seems that the public has now taken an unwavering bullish stance on the city's car plates - new and old.

A second-hand Shanghai car plate was priced at over 80,000 yuan even before yesterday's auction.

Last July, in a bid to curb market speculation, the municipal government extended the minimum holding period of car plates before resale from one to three years.

However, since then the average auction price has increased more than 43 percent.

Exasperated local motorists point out that a car licence plate now costs more than some cars and half-joke that the humble metal plate is an ideal long-term investment.

"As a scarce resource, Shanghai car plates are definitely going to gain value over the years," said would-be car buyer Lynn Wang.

"The three-year lock-up period might not be too long for some people looking to profit from their resale," added Wang, citing limited supply and ever-rising demand for cars as key drivers.

Though Shanghai plate prices are now far beyond her budget, Wang said she still favors getting a local licence plate rather than an out-of-town one.

Some motorists have gone for this cheaper option, even though they face restrictions on key roads during rush hour.

"Though cars with out-of-town plates are only restricted from traveling on elevated bridges at certain hours, who knows whether there will be any further restrictions on them in the future," Wang reasoned.


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