Business / Industries

Seized cars sold in online auction

By Wang Zhenghua in Shanghai (China Daily) Updated: 2012-07-11 10:58

Online buyers have bid vigorously for a car in the country's first Internet auction for property seized by the court.

The people's court of Ningbo's Beilun district in East China's Zhejiang province put a BMW sedan up for auction on Taobao at 10 am on Monday. It attracted 53 bidders who pushed the price of the car up to 330,900 yuan ($52,000) before the auction closed at 10 pm on Tuesday.

That is an increase of 131,000 yuan from the sedan's starting price of 199,900 yuan. The results have pleased the Beilun court that is acting as a testing ground for the new transparent approach to dealing with confiscated property.

Wang Yu, the court official in charge of the online auction, said the experiment had been a success.

"Although there are still uncertainties about the final outcome of this auction the successful bidder may not come up with enough money for the purchase for example - so far we regard the prospects of online auctions favorably," Wang said.

Another vehicle in the pilot program, a Mitsubishi Outlander SUV put up for auction by Ningbo's Yinzhou district people's court, drew 15 bids by the end of the auction with its final price raised to 67,000 yuan from 50,000 yuan.

Taobao staff said on Tuesday that some of the bidders were from outside of Zhejiang.

Experts said online auctions could ensure a fairer and more transparent system for dealing with property seized by the court and attract more buyers by cutting fees, although some raised concerns about under-evaluation and depreciation of the seized property.

The High People's Court of Zhejiang said it will expand the online auctions to 19 grassroots courts spread across all the major cities of Zhejiang including Hangzhou, Ningbo, Wenzhou and Shaoxing.

Lin Yi, vice-president of the High People's Court of Zhejiang, told the Legal Daily newspaper on Monday that selected suitable items will be auctioned online in the expanded program.

Lin said the online auctions, which avoid commissions paid by buyers, will maximize the value of the seized property and benefit buyers.

Court auctions have traditionally been carried out by a third party in a brick-and-mortar auction house, with the buyers commission payment being an area ripe for corruption.

In Zhejiang, there have been continuous calls to reduce the auction commission, despite the high court applying a new commission standard last February that saw money paid by buyers to auction companies drop by 36 percent.

Observers said by using Taobao, which has about 400 million registered members, the auctions can reach a wider range of potential buyers and even bidders from overseas. It also eliminates human error and potential under-the-table operations.

"Online auctions give buyers a relaxed and comfortable environment to consider the item and bid," Huang Jia, publicity official at Taobao, said on Tuesday.

"In the two auctions in Ningbo, buyers had 36 hours to evaluate and compare the auctioned objects with others, that's a very ample time frame," she said.

In the BMW sedan auction most of the bids were made in the first hour, with the first bidder submitting an offer of 200,900 yuan only 10 seconds after the auction began.

Most of the potential buyers remained conservative in their offers, with the stakes being raised by 1,000 yuan a bid.

The final bid in the SUV auction was submitted at 9:59 pm on Tuesday. Both auctions closed at 10 pm on Tuesday night.

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