THE averaged price for a car plate in Shanghai today unexpectedly nosedived to a six-year low at the first auction for this year after the municipal government adopted new rules.
However, a breakdown in the bidding system, both internet and hotlines, added fuel to the flame of the price sink and drew complaints from many eligible bidders.
The averaged successful price was auctioned at 23,370 yuan (US$3,245), only half of a recording high of 56,042 yuan for last December, according to Shanghai International Commodity Auction Co, the organizer of the monthly event.
It was the lowest price since September 2002 when the price is recorded at 24,040 yuan.
The lowest winning price also plummeted to 8,100 yuan, compared with 50,000 yuan from a month earlier.
It was also the third lowest price since the monthly auction system started in 2000, trailing 100 yuan set in December in 2002 and 10,800 yuan for May 2004.
About 20,539 bidders compete for 16,000 licenses this month, as the city government moved ahead the February quota due to the traditional Lunar New Year, which falls on February 7.
The city government started new rule from this month, which allowing more bidding opportunities and open the lowest successful price to public during the auction process for bidders reference, aiming to help them to make their own decision rather than depend on advised price from dealers.
The price beat earlier market speculation at around 30,000 yuan for the averaged winning price.
``I never thought the price could drop at such a wide margin,'' said Yuki, who won the bid with 16,900 yuan. ``I earlier planned to offer 45,000 yuan.''
Yuki is one of the lucky dog who was able to successfully change her price offer. But many bidders were bared from even make their first offer due to the breakdown of bidding system.
Zhu Junyi, director of an auto research department under Shanghai Economic Committee's Information Center, said around 10,000 eligible bidders failed to make their bids due to a visiting traffic both on internet and hotlines.
Many bidders said they failed to login the online bidding system and access to hotline connection since the beginning of the first round of bidding at 10 am.
Others said they are not be able to change the price in the second round of bidding and the connection both online and through telephones were also easily to be interrupted.
``The final price is basically set on bidders' first offer as many people failed to revise their price and that caused the huge gap between the lowest and averaged winning price,'' Zhu said.
``Municipal government have launched emergency meeting after received many bidders' complaints,'' he told Shanghai Daily.
Wu Yi, vice director of Shanghai Urban Transport Management Bureau said earlier that local government has invested to upgraded the bidding system technology.
But he also said the system could be overloaded if a large number of crowds changed the price at the same time, particular at the last minute.
Despite the enlarged available quota and new rules that put some auto buyers to hold the wait-and-see attitude, other industry analysts also attributed the low price to that many speculators took advantage of the new rules to offer the price at low level.
While many bidder are cheering for the new rules that started to show effectiveness on controlling the soaring price, Information Center's Zhu warned that the averaged price could still rise in the following months.
``This month's price is not likely to be the benchmark for the whole year due to the system problem. Many bidders still offered 30,000 yuan to up to 50,000 yuan.''
Duing today's auction, for the first 30 minutes of the first round biding period before 11 am, the possible lowest successful price remained at around the minimum offer of 100 yuan.
Then the price climbed up straightly to top 8,000 yuan with more offers before meeting the 11:30 am deadline.
An earlier small-sized research done by the Information center last July showed many auto buyers anticipated the averaged price to be 35,000 yuan to 40,000 yuan after surveying 120 auto buyers.
However, the top price they are willing to afford could hit 150,000 yuan.
Shanghai is the only city on the Chinese mainland to issue plates by auction and the average price has increased fivefold over the past seven years.
The car plate has been named as ``the most expensive iron plate'' among local auto buyers as the recording high of 56,042 yuan is equivalent to half of the price of an ordinary Volkswagen's Santana sedan.
Shanghai municipal government has reiterated its stance to develop public transportation including building more Metro lines and promoting buses as a top priority.
It is also said the city is working on congestion charge, which is expected to replace the exiting auction system as early as 2010.
Next auction will be held in March with date to be announced later.