Shanghai Car Plate is NOT Investment

This is a follow up post for my entry Shanghai Car Plates IS Investment I wrote 4 months ago. Within just 4 months, the high valued car plate dropped dramatically.

My Record on Car Plate Price in Shanghai

From my blog post on Car Plates in Shanghai, you can get some idea about how the prices of a car plate in Shanghai changes over time.

Shanghai’s Car Plate Bidding

Shanghai is the only place in China to have Car Plate Bidding practices. Every month, around 7000 car plates are issued to the public and people bid for the plates in a public auction. With the high demand for private cars, and limited number of car plates, the car plate price in Shanghai went all the way high to more than 50,000 Yuan last month.

This Month

This month, the lowest bidding price for car plate dropped to 8,100 Yuan, and the average winning price is 23,370 Yuan, less than half of the record high of 56,042 Yuan in December, 2007.

What Caused the Drop?

The most important change is, this time, the authority made the bidding price of all the other buyers public, so people can see how much other people want to pay. Also, people are given a second chance to change their bidding price according to other’s price. This helps the higher bidder to lower down their price, and the lower bidder to raise their price – to finally make the bidding price more concentrated among a certain number.

Before that, the price guideline is given by the car dealers – they have some sort of information sources to tell the buyers about the finally winning price, so everyone has to pay higher than that, and this guidance price always raises.

The other reason is with the Spring Festival in Feb, they pause the Feb bidding and double the amount of car plate supply this month.

The final reason is because of the bottle neck of the Telephone and Internet system of the authority, many people could not dial in via telephone or logon to the web site. This further reduced the number of Would-be buyers.

Is it an Investment?

Everyone is trying to predict the future. I am the same.

Four months ago, I regret that I didn’t bid for a Shanghai Car Plate in my post: Shanghai Car Plates IS Investment. I changed my mind this month, and very likely, I will change my mind again in the next few months if the car plate price goes all the way high.

P.S. This post should have another title: Shanghai Car Plate = 8100 RMB

4 thoughts on “Shanghai Car Plate is NOT Investment

  1. elliottng

    This seems like a microcosm of all investing in China, no? Markets go up and down, triggered by some (usually) well-meaning regulatory change. So on the one hand it looks like there are huge opportunities in China and growing markets everywhere. On the other hand, the rules change and one needs to stay flexible, and there are plenty of ways to lose money even in the face of these huge opportunities.

  2. Gloriana

    Hi! I would like to know if you have any idea o taxes on cars here in China, I would like to know if the tax per car is according to the motor, year, brand?? How does this work?? I you could help it would be great!! Thanks!

  3. Roger

    Hello Wangjianshuo

    nice Blog:

    I am also investigating to buy a (company) car

    I have heard or read that the Shanghai government will end the bidding sytem. I am not sure if it is true. But this also can be an extra reason for the lower prices of the biddings and the extRA plates. Reason for this : better transportation ( bus subaway etc) system in and around shanghai! Can anyone confirm this?

    cheers Roger

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