Bidding on Shanghai license plates crazier than the traffic

By Wang Han Source:Global Times Published: 2015-12-23 18:53:01

"I won a Shanghai license plate on my second bid!!!" My friend Kathy, a Chinese, shared the exciting news on her WeChat last week. The post quickly garnered dozens of comments about how lucky she was, but the only thought that crossed my mind was how crazy she is.

At that moment I thought she was crazy just for owning a car in Shanghai. The traffic in this city is so maddeningly congested (recently ranked one of the world's worst), with roads and highways constantly in a state of gridlock, that it's faster to walk anywhere downtown than take a taxi or bus. Why would any car owner subject themselves to this?

But what I realized is even crazier - and I mean certifiably insane - is that Kathy didn't actually "win" a vehicle plate; she paid 84,600 yuan ($13,000) for it. That's nearly 16 months worth of salary for a typical office worker in Shanghai. It suddenly hit me why Shanghai license plates are often referred to as "the most expensive piece of metal in the world."

I'm new to Shanghai, so until I saw Kathy's post I knew nothing about the monthly municipal license plate auction. Introduced in the mid-1980s in an effort to curb the number of cars on city roads, China's three largest cities only allow a set number of vehicles to be registered each year. With 3 million privately owned cars currently in Shanghai, obtaining a license plate here is fiercely competitive.

According to statistics provided by the Information Office of Shanghai Municipality, a total number of 179,133 people bid for 7,698 plates in the latest auction on December 19. Less than 4.3 percent of bidders were successful in winning a plate. With 23 people competing per plate, the statistical odds of winning the China Lottery are higher than winning a Shanghai license plate. As the average price paid for a plate at last Saturday's auction was 84,572 yuan ($13,060), car owners are literally driving the price up on each other!

As for the auction process, prospective bidders first have to make a 2,000 yuan deposit and a 100 yuan registration fee. In exchange they receive a disc which they can use to register online to bid three times during the next six months' allotments of plates. Auctions usually take place on the third Saturday morning of every month between 10:30 am and 11:30 am.

During this brief time frame, two frenzied 30-minute bidding sessions are held, whence participants have just one chance to bid within the price ceiling set by the authority. Tech-savvy bidders using specialized "scalping" software wait until the final minutes to place their final bets.

Some bidders, like my friend Kathy, choose to turn the entire process over to paid auction agents. Kathy booked a 10,000 yuan service package, which obviously paid off. Such services can be found on Taobao and range from 8,000 to 18,000 yuan. Most agents stress that they offer a "no-win, no-fee" warranty.

Since mid-April of this year, cars registered outside Shanghai cannot drive on elevated roads during peak hours (7 am to 10 am and 4 pm to 7 pm). Registering cars outside Shanghai used to be a "loophole" until the restrictions were tightened. This policy came as bad news for my friend Chen, a local car owner who has yet to win an auction and therefore must drive downtown.

"I really need a local license plate, because without it driving downtown is exhausting and excruciating. I hesitated to bid last year because the price is insane, but this year I realized my daily commute cannot continue without a Shanghai plate. So I borrowed money from my parents, but unfortunately I did not win."

Chen added that the current bidding system does not distinguish between the needs of local drivers who desperately need a plate and those who don't. "A colleague of mine who already has two Shanghai license plates in his family successfully won a third one this month," he said enviously.

Indeed, as reported by the Global Times last year ("Action at the auctions," April 28, 2014) more than 300 online bidding agents were discovered operating through secondhand car dealerships or car paint shops, which makes the odds even greater against individual bidders such as Chen.

A press officer from the Shanghai Municipal Transport and Port Authority told the Global Times then that "bidding agents are working in a gray zone that is hard to supervise," but that it is up to commerce authorities to determine if laws are being broken.

But with Shanghai pulling in 84,600 yuan per plate from big-spenders like my friend Kathy, it's not realistic to expect auction officials to be too concerned whether laymen like Chen are getting shoved out of the bidding process by agents and automated software.

The municipal government's major concerns in this regard are to generate revenue and limit the number of vehicles on the roads, which means that the craziness will continue.

The opinions expressed in this article are the author's own and do not necessarily reflect the views of the Global Times.

Posted in: TwoCents, Metro Shanghai, Pulse

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