 |
|
|
|
on Thursday, April 14, 2005 - 10:51 PM AST - Reads
|
|
|
|
|
By George Iliev
Individuals and private companies in Shanghai are free to buy a car but have to go through an arduous procedure before driving off. In order to register a new car, one has to bid in an auction for a restricted number of licence plates. The "sealed bid" auctions have been held by the local government once a month since 1986, with the lofty goal of keeping the number of cars under control and curbing traffic congestion. Shanghai is the only city in China that applies such restrictions on car registration.
|
|
About 5,000 licence plates are sold each month at prices averaging above 30,000 RMB, on top of the already high car prices in China. The highest price at an auction was reached in April 2004, when licence plates cost their winning bidders an average 45,492 RMB, almost equalling the price of a base car. The lowest supply of number plates over the last 12 months was in February, when a mere 3,800 were offered because of the trough in demand around the Chinese New Year. The number of plates offered is calculated according to a formula that includes the number of scrapped cars that are removed from the roads and monthly car sales in Shanghai. Bidders usually exceed the supply of number plates by a factor of two.
Here are some statistics for the last year:
Month - Plates offered - Average winning bid - (Number of bidders)
|
April 16, 2005 - 5,000 plates - ?
March 05 - 4,000 plates - ?
Feb 05 - 3,800 plates - 32,425 yuan (8,949 bidders)
Jan 05 - 5,500 plates - 32,520 yuan
Dec 04 - 5,500 plates - 30,282 yuan (9,005 bidders)
Nov 04 - 6,600 plates - 27,620 yuan (9,188 bidders )
Oct 04 - 6,600 plates - 29,768 yuan (9,519 bidders)
Sept 04 - 6,640 plates - 30,033 yuan (10,634 bidders)
Aug 04 - 6,800 plates - 25,991 yuan (15,506 bidders)
July 04 - 6,600 plates - 23,544 yuan (14,464 bidders)
June 04 - 6,233 plates - (nearly 20,000 bidders)
May 04 - 6,527 plates - 34,226 yuan
April 2004 - 5,500 plates - 45,492 yuan (record high avg price)
|
|
|
The Saturday bidding is held once a month at an auction house in Anting, an hour west of Shanghai. To participate, one must register at one of several places in Shanghai and pay a $250 deposit. The bids can also be placed by phone or on the Internet (since April 2003), but most people prefer to go to the site to size up the competition and enter their bid in the computer themselves...and then wait nervously to see whether what they offered was above the cut-off line.
There used to be separate auctions for imported and locally-made cars until 2002, and the merger of the two procedures resulted in somewhat higher average prices. There used to be also a separate auction for foreigners, but it was abolished in December 2001 and since then foreigners with residence permits have been treated on an equal footing with locals.
The organiser of the monthly auctions, Shanghai International Commodity Auction Co Ltd, has raised 3.6 billion yuan from car plates between 2000 and June 2004. The sum was reportedly spent on improving Shanghai’s road network. A total 71,600 car plates were auctioned in Shanghai in the 12 monthly biddings in 2004 alone and the total number of bidders was double that figure, at 132,600. The supply of number plates on the market has been growing steadily, from 14,000 plates in 2000 and 15,900 in 2001 to 31,850 in 2002 and 53,068 in 2003. Prices, however, used to be in the 20,000s two years ago, even though supply was smaller.
|
|
There used to be several ways of circumventing the bidding process, but the loopholes have been tightened lately. Many Shanghai residents used to register their cars in neighbouring cities, such as Suzhou, Hangzhou or Kunshan, or as far away as Nanjing, at a much smaller cost. Shanghai officials estimate 20,000 drivers bought plates in nearby towns in 2003, paying about several hundred RMB per plate. Therefore, the Shanghai authorities started leaning on 15 cities in the Yangtze delta not to allow car registrations to Shanghai residents or at least to hike plate prices. And they succeeded: since March 2004 a non-local can get a licence plate in one of the cities around Shanghai only with the mediation of a specialised car registration agency.
|
|
Otherwise, if you live in Shanghai and want to follow, say, the 4,000 Shanghai drivers that bought a plate in nearby Jiaxing in 2003 (at 200 RMB a piece), you must prove that you have either married a Jiaxing resident or bought a house or set up a company in the city. And then, with an out-of-town plate, you'd better stay away from Shanghai roads in rush hours, or risk being picked upon by the police.
The Shanghai authorities extended the restrictive regime on car registrations to public institutions, government units and state enterprises in the summer of 2004 after finding out that some public bodies were buying and registering cars (without restrictions) and leasing them to private companies or individuals. Three auctions for public cars have been organised since August 2004. The price of a licence plate broke 33,000 yuan at the latest auction in January, when 280 plates were offered to institutions and state enterprises. According to August 2004 statistics, government and party departments and state enterprises in Shanghai own about 500,000 cars.
The authorities have left only one official channel to get around the auction process: allowing existing owners of motorcycle licences to swap them for car licences. This policy was launched in 2003 and the fifth licence swap since then was held between March 27 and April 5. Another swap is set to be held by the end of 2005, with the aim of halving the number of motorbikes on the roads.
A new Road and Traffic Safety Law that came into effect in China on May 1, 2004 offers a glimmer of hope that the auctioning of licence plates in Shanghai may be revoked some time in the future.
The law stipulates that public bodies in charge of vehicle registration cannot impose additional procedures or charges to the standard car registration process. The Ministry of Commerce has also said that the Shanghai auctions are illegal under the new legislation. Yet the Shanghai authorities claim that the auctions are a transitional measure and have vowed NOT to scrap them for the time being.
And finally, there is still the possibility of buying a used car in Shanghai. Some 142,000 used cars were sold in the city in 2004, according to the Shanghai Second-Hand Car Association. Now there are some 900,000 cars on the streets of Shanghai, of which 300,000 are owned by individuals.Car ownership averages 5.3 cars per 100 households, but the ratio rises to nine cars per 100 households for people in the 30 to 39 age bracket.
Back to car prices, fewer than 5% of all private cars in Shanghai have been bought for less than 100,000 RMB, according to official reports. In addition to the high cost of a number plate, car owners in Shanghai pay an average 12,000 RMB annually in fees and tolls, including a 150 RMB monthly tax. Maybe as a compensation, the city authorities scrapped from January 2005 the 8 RMB annual bike tax which everybody who owns a bike was supposed to be paying. If you never paid the tax, you were one of 10.3 million people in the city who never bothered either. But now at least you are no longer a criminal. So why wait to drive off, when you can ride off.
|
|
|
 |
|
|
|
