Shanghai Studies Singapore-Style Limit on License Plate Validity

Shanghai is studying limiting the validity period for a car license plate as part of a broader review of the way it distributes the quota of new vehicles.

The city is actively studying new measures while ensuring the stability of prices, according to a statement on the municipal government’s website, which didn’t give more details.

Shanghai began auctioning license plates in 1994 to manage the increase in vehicles, and the measure has since been adopted by other cities in China to tackle congestion and pollution. If implemented, the move to impose a term period on a license plate would mimic the regime in Singapore, where car owners bid for a 10-year right to register and operate a vehicle.

“This doesn’t solve the problem of restricting Shanghai’s vehicle population and cutting down demand,” said Yale Zhang, Shanghai-based managing director at Autoforesight Shanghai Co. “Consumers will just try to get around it by registering their vehicles in other cities that have fewer restrictions.”

Prices for a Shanghai license plate have surged to as high as 90,000 yuan ($14,500) in past years, sparking complaints among residents about the affordability of owning a car. The average transacted price in May was 74,216 yuan, according to Shanghai’s officially designated auction agency.

Other cities may follow Shanghai’s lead if the measure is enacted, though it will take a long time, Zhang said.

— With assistance by Alexandra Ho

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