SHANGHAI: The city government has revised the rules for license plate auctions to curb the high prices seen in recent years.
The move is expected to give more people the chance to own a private car.
Bidding for the first allotment of private license plates will take place on Saturday, when 16,000 plates will be put on the block, up from the 7,500 that were sold in the last round.
The monthly quota of plates is to be steadily increased to meet the rising demand for private cars by reducing the number of cars slated for the government and foreign-invested companies, Wu Yi, deputy director of the transportation bureau, said Monday.
The new regulation allows prospective car owners to offer tender prices more than once. They will be provided with the updates on the lowest winning tender and allowed to change their original price twice within 30 minutes after their first bid. Price adjustments, however, will be capped to a range of 600 yuan (about $80) to prevent steep increases.
"That means that if the bidder offers a tender price of 50,000 yuan and the lowest winning tender is 48,000 yuan, he can only adjust his price to between 47,700 and 48,300 yuan," Wu said.
The new measure is expected to help slow the rapid ascent of license plate prices, benefiting potential car owners who have been intimidated by the surging bid prices over the past few years.
Shanghai is the only city in China to have set up a quota-bidding system for private license plates to deal with an overheated car market and mounting traffic pressure.
The system has been in place since 1994 and is estimated to have kept 1.5 million cars off the roads, which has helped maintain air quality and reduce traffic, Wu said.
However, the limited number of plates auctioned off each time creates a lot of anxiety among people eager to buy their own cars.
The average winning tender last year was well over 40,000 yuan, although prices spiked to above 50,000 in the fourth quarter, with the highest bid peaking at 56,042 yuan last month.
Wu said that although the rising demand for cars has had an effect on prices, certain dealers in Shanghai are believed to have manipulated bidding prices by offering unreasonable advice to customers.
For example, some dealers have promised "one-stop service" that includes a "guide price" for their license plate bids.
Since December, the transportation bureau has punished a total of eight car dealers for misconduct after they gave unreasonably high bidding price "advice" to their customers, driving people to tender bids that were much higher than necessary.