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Plates Stay Hot as Car Sales Boom
The price of car license plates in Shanghai keeps rising as robust private demand for new Chinese-made cars has collided with government plans for limiting the number of vehicles on local streets.

In Saturday's monthly license-plate auction for individual and private-company buyers of domestically made cars, the lowest successful sealed bid was 21,000 yuan (US$2,530), 1,200 yuan more than in July. The average winning bid was 21,601 yuan, a 697 yuan increase.

Both prices were records for the auction in its present form. Saturday also marked the first time both have been over 20,000 yuan since the city eliminated floor prices for the auction.

Before January 2000, 20,000 yuan was the lowest bid accepted. The minimum was scrapped to help local manufacturers sell their output.

Separate, less-frequent auctions handle private license plates for imports. While most buyers at either auction bolt their plates onto new cars they have bought or will buy, each kind is also good for second-hand cars in its category.

"I had expected the wild price increase to be curbed this month as the government has issued more license plates to keep prices at an acceptable level," said an official of Shanghai International Com-modity Auction Co., organizer of the private-plate auctions.

"But it seems that the demand for private cars in Shanghai is even more dynamic than expected, " the official said. "Potential buyers have abandoned a wait-and-see attitude after the government made clear it won't provide free private license plates in the next few years."

Winning bids have risen 17.7 percent since the local government released a transportation white paper in June that said the city will continue limiting the number of cars in the city.

The government said it will continue to impose quotas on private license plates for at least the next five years to limit air pollution and traffic congestion.

This month, the supply of new private plates remained at July's record level of 3,000. Two hundred fewer plates had been auctioned off the month before.

There continue to be many more would-be buyers than available plates, however.

"Purchases of private cars have taken off in Shanghai. Individual buyers are becoming the mainstream of local car buyers," said Xu Zhengyu, deputy general manager of Shanghai Volkswagen's sales and service center in the city.

About 70 percent of the center's customers are private buyers this year, compared with 40 percent last year, while sales in the first seven months rose more than 20 percent year-on-year, Xu said.

Analysts said the introduction of new family cars and price cuts made after China's entry into the World Trade Organization have energized the country's potentially huge private-car market.

Shanghai Daily August 26, 2002)

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