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Private car plates get cheaper in city

Prices for private car plates in Shanghai fell to a four-month low this month in response to a larger quota and speculation the system would be scrapped.

The average price for a car license dropped 5,842 yuan (US$856), or 17 percent, to 27,552 yuan this month from February, the Shanghai International Commodity Auction Co Ltd announced after yesterday's auction. The lowest price was 26,600 yuan, down from the 33,000 yuan in February.

Following a rebound in February, both prices were the lowest since December, when the average was 31,000 yuan and the lowest 31,665 yuan.

Local dealers attributed the price drop to the increased number of plates. More importantly, car owners are scaling back their bids after the government said the auction system might be dropped.

A total of 6,000 plates were auctioned, 800 more than last month and the highest this year. But the monthly auction also attracted 18,575 participants, an increase of 1,727 from a month earlier, according to the auction company.

"Bidders are reluctant to pay a lot of money for the car plates as they fear losing their money if the system was canceled," said a Ford dealer surnamed Cheng.

Huang Rong, director of Shanghai Urban Construction and Transportation Commission, said last month the car plate auction will be canceled as the city improves the transport system but no timeline has been revealed.

His remarks triggered the plate price in the second-hand market, usually the benchmark for the auction, to fall from 34,000 yuan to 28,000 yuan.

But industry sources said the city is not likely to abolish the system in the near future as it wants to control its vehicle population to reduce pollution and traffic congestion particularly with the 2010 Shanghai World Expo approaching.

"The system is still one of the most effective ways to limit the total vehicle population," said Zhu Junyi, Shanghai Information Center's auto industry research office.

"There should be a period with transitional policies if the car plate auction system was dropped," he added.


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