Price ceiling ordered for car plate auctions

A price ceiling will be applied at Shanghai's monthly car plate auction for the first time as part of the local government's efforts to cool the market.

The move comes with the average successful bid at last month's auction reaching just over 90,000 yuan ($14,530).

Bids of more than 83,600 yuan won't be accepted by the online auction system during the first round of bidding, the local authority said on Monday. This month's auction is on April 20.

"The ceiling price is the weighted average price for this January, February and March's average for successful bids," said Huang Xiaoyong, an official with the Shanghai Municipal Transport and Port Authority's cooperation office.

Asked whether the same cap will apply to the May and June auctions, Huang said the authority will evaluate April's ceiling-price trial and "further optimize the auction process".

Zhang Xingliang, from Shanghai who failed to win a car plate in the February and March auctions despite gathering a dozen friends for last month's auction to help him bid for a plate, said he isn't sure that such a policy can bring the price down.

"The ceiling price only limits the offer to the first round. You never know what's going to happen during the second and third rounds," said Zhang, adding that everybody expected last month's price to fall after the local government introduced policies to regulate the market, but it didn't.

"Rules ... have been changing from time to time and even the most experienced bidders aren't sure about April's auction price," he said.

The city government said nine days before the car plate auction on March 23 that the price of a secondhand car plate should not exceed the auction price of new car plates. It blamed the rising price of secondhand plates for pushing up the new-plate prices.