Mainly because the government is trying to limit congestion and the number of vehicles driven in Shanghai. There are a set number of license plates auctioned off and not surprisingly, the wealthiest of car owners are pushing up the price of plates so they can ensure unrestricted driving privileges in the city.
What about those who can’t afford to pay the ever escalating cost of a license plate? Are their cars just sitting parked somewhere? Of course not. Many simply register their car in a nearby province then drive around Shanghai with certain restrictions. For example, cars not registered in Shanghai are banned from overhead expressways at peak times.
Critics of the Shanghai license plate auction say the city should do what Beijing does and hold a lottery for license plates. If you win, you are in for a far lower price. If you lose you can always register your car somewhere else, but you can’t drive it in the city limits during business hours.
With China moving toward an estimated annual sales pace of 30 million autosby the end of this decade, expect the Shanghai license plate auction to involve higher prices. Who knows, maybe someday it will cost more to register a car than to buy it in Shanghai.
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