The average price for a car plate in Shanghai, long a bone of contention, yesterday unexpectedly plunged to a six-year low at the first auction for 2008 under new rules enacted by the municipal government.

 

However, a breakdown in the bidding system, both via Internet and phone hotlines, is believed to have contributed in part to the price decline and drew complaints from many eligible would-be buyers.

 

The average auction price was 23,370 yuan (US$3,218), less than half of the record high of 56,042 yuan in December, according to Shanghai International Commodity Auction Co, organizer of the monthly event.

 

It was the lowest price since the 24,040 yuan recorded in September, 2002. The price beat market speculation which widely tipped about 30,000 yuan as the average price.

 

And the lowest successful bid yesterday plummeted to 8,100 yuan, compared with 50,000 yuan a month earlier.

 

It was also the third lowest price since the monthly auction system started in the city in 2000, trailing 100 yuan in December, 2002, and 10,800 yuan in May, 2004.

 

About 20,539 bidders competed for 16,000 licenses this month, as the city government moved ahead the February quota due to the traditional Lunar New Year, which falls on February 7.

 

The city started the new rules this month, which allow more bidding opportunities and open the lowest successful price to the public during the auction process. This helps people make their own decisions rather than rely on dealer advice.

 

"I never thought the price could drop so much," said a woman named Yuki, who won her bid with 16,900 yuan. "I had planned to offer 45,000 yuan."

 

Yuki was one of the lucky ones. Many people were barred from even making a first offer due to the breakdown in the bidding system.

 

Zhu Junyi, director of an auto research department under the Shanghai Economic Committee's Information Center, said about 10,000 eligible people failed to make bids due to crowded traffic on both the Internet and the hotlines.

 

Many said they could not log into the online bidding system nor access the hotlines from the first round of bidding at 10 a.m.

 

Others said they were not able to change their price in the second round of bidding due to Internet and phone-line hold-ups.

 

"The final price is basically set on bidders' first offer and many people failed to revise their price, causing the huge gap between the lowest and the average winning prices," Zhu said.

 

"The municipal government had an emergency meeting after receiving many bidders' complaints."

 

Wu Yi, vice director of the Shanghai Urban Transport Management Bureau, said earlier that the city has invested to upgraded the bidding-system technology.

 

But he also said the system could become overloaded if a large number swamped the lines simultaneously.

 

While many bidders hailed the new rules that controlled soaring price, Zhu warned that the average price could still rise in following months.

 

"This month's price is not likely to be the benchmark for the whole year due to the system problems," Zhu said. "Many bidders still offered 30,000 yuan and up to 50,000 yuan."

 

Shanghai is the only city on the mainland to issue plates by auction and the average price has increased fivefold over the past seven years.

 

The next auction will be held in March on a date to be announced.

 

(Shanghai Daily January 13, 2008)