CAR plate prices in Shanghai rebounded strongly this month as market demand for auto sales increased from a slight decline the previous month.

The average price for a car plate rose to 33,394 yuan (US$4,882) in February, an increase of 3,995 yuan from a month earlier, according to a spokesman for the Shanghai International Commodity Auction Co.

The lowest successful bid increased 4,400 yuan to 33,000 yuan.

The city government offered 5,200 car plates for auction, the same number as in January, but the number of bidders increased by 304 to 16,848.

"We had anticipated a price rebound because there were more visitors to our showrooms and we sold more vehicles," said a Chevrolet dealer surnamed Chen. "But the price went up so quickly it really beat our expectations."

Chen said car plates remained in high demand after vehicle sales rebounded. Models with engines less than 1.6-liter capacity sold well as the relevant sales tax had been cut by 50 percent, he added.

Consumer confidence in the auto industry has increased in line with government rescue packages enabling it to contend with the global financial crisis.

The recovering stock market has also increased individual purchasing power and helped to increase vehicle sales, analysts say.

In addition, car makers including Shanghai Volkswagen also launched bigger price discounts to attract consumers back to showrooms.

(Shanghai Daily February 22, 2009)