In Shanghai, A License Plate Can Cost as Much as a Car

The average price for a Shanghai plate soared to 75,000 yuan ($12,000) at the city’s license plate auction over the weekend, roughly equal to the retail price of a brand new, fully loaded Geely MK-II sedan. Shanghai plates went for an average of 50,000 yuan a year ago, meaning prices have risen nearly 2,000 yuan a month.

Yolanda Dong, a market manager at a Japanese firm, paid 77,000 yuan for her plate. By comparison, her Peugeot 307 cost her 100,000 yuan.

 “I had to buy the plate no matter what,” said Ms. Dong, who bought her car four months ago and has been bidding to get a Shanghai plate since then. “I can’t have my car sitting there doing nothing.”

Getting plates outside Shanghai is a less appealing option. The city doesn’t allow vehicles registered elsewhere on its elevated highways during rush hours.

 “No matter how nice a car you have or how much your car is, if it can’t get on the elevated highways during rush hours, it means nothing,” said Ms. Dong.

Shanghai’s plate-auction system is a manifestation of the congestion problems plaguing officials around China, as they grapple with increasingly affluent residents who see car ownership as de rigueur. It also plays into broader worries about China’s increasing oil use and its massive pollution problems.

How does Shanghai do it? An auction is held on the third Saturday of each month, and about 8,000 plates are issued each time. This month, 9,000 plates were issued, a slight uptick.

How does someone participate in the auction? First, the applicant needs to go to a branch of Bank of Communications to register. There, the applicant puts down a 2,000 yuan deposit to get an account number and a computer disk. The disk has a program that the motorist uses to connect to the system that allows auction participants to bid, using the account number. The applicant has only three chances to bid, at 100 yuan a pop.

Sound convoluted? According to one expert, it beats the system used by Beijing. Unlike Shanghai, which auctions the plates, Beijing distributes them via lottery, with participants paying more modest administrative fees. “The Shanghai system seems more scientific and brighter,” said Niu Fengrui, researcher and former head of Institute for Urban and Environmental Studies Chinese Academy of Social Science.