 Anchor: The average price for a car plate at auction in Shanghai has fallen to a six-year low of around 23 thousand yuan or just over 3 thousand US dollars.
The auction on the weekend was the first under new rules enacted by the municipal government.
Our Shanghai correspondent takes a closer look.
Reporter:
At 11:30 Saturday morning, the screen of the auction center showed the lowest successful bid was only 8,100 yuan, over 40,000 yuan less than that of a month earlier. Many bidders couldn't help cheering.
Saturday, 16,000 licenses, doubling December sales, has been put up for auction with the city government offering the February allotment at the same time because of the Lunar New Year which falls on February 7.
Despite the diving of the lowest bidding price, the average auction price also plummeted to 23,370 yuan, less than half of the record high of 56,042 yuan in December. It was the lowest price since the 24,040 yuan recorded in September, 2002.
A man who won his bid with a bid over 20,000 yuan is among those who hailed the new bidding rules.
"It's a good change. At least, it prevents the car dealers from jacking up the prices."
However, a breakdown in the bidding system, both via Internet and phone hotlines, is believed to have also contributed to the price decline and drew complaints from many eligible would-be buyers.
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. According to Zhu, 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.
The related sector earlier promised to upgrade the bidding system to tackle the problem.
Shanghai is the only city on the mainland to issue plates by auction. The vehicle control policy effective in 1994 has helped to reduce the number of new cars added to Shanghai's roads by 1.5 million. However the surging demand for private owned cars has pushed the average price up fivefold over the past seven years.
To improve the auction system and slow the surge in prices, the municipal government has introduced new bidding rules, which include two bidding periods and have offers from other bidders being made public for the first time - a move that will help bidders set their own prices rather than relying on information provided by car dealers.
The just concluded plate auction is the first one after the new policy took effect.
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