• Thu
  • Jul 10, 2014
  • Updated: 4:28pm
BusinessChina Business
VEHICLES

Beijing licence plates fetch twice the price of the car on black market

Beijing's clampdown on new registrations spurs residents to buy, sell or rent vehicle permits

PUBLISHED : Tuesday, 04 February, 2014, 3:57pm
UPDATED : Wednesday, 05 February, 2014, 1:52am

Beijing's clampdown on new car registrations is creating a scramble for licence plates and fuelling a boom on the black market where prices have hit as high as 200,000 yuan (HK$256,000), almost double the price of the mainland's best-selling car, the Ford Focus.

Keen to curb pollution and traffic jams, the capital instituted a lottery in 2011, where it initially awarded plates to one in 10 people hoping to get a car. This year, it will cut the allocation by 40 per cent to 150,000, meaning only one in 150 will get a plate.

The long odds have created a thriving black market, even though it is illegal to buy, sell or rent a number plate. Those eager to own a car say they are willing to take the risk.

"I participated in every lottery over the past two years but have never won. I'm desperate," said Han Kuilong, who rented a car plate last month for 5,000 yuan a year. "I live on the outskirts but work in the city. Life is very inconvenient without a car."

The Beijing municipal government's traffic management bureau confirmed that trading in car plates was illegal.

Lawyers say the government can fine people involved in these deals and revoke their licences but the practice is so widespread it is impossible to police.

"Such deals are unlawful," said Yang Lisha, a lawyer. "But many people are in this market, so the cost of enforcement is very high."

Beijing resident Zhang Cheng said he had been taking part in the lotteries for the past two years but his patience had run out and he was now seeking to rent a plate. An online lottery this month attracted nearly 2 million participants for about 25,000 plates.

"The government is depriving us of our rights to enjoy a better life. Instead of restricting car plates, they should build more roads and improve infrastructure," Zhang said.

Estimates on the size of the black market are hard to come by but a car dealer in Beijing said his firm rented out nearly 200 plates last year. There are also several websites that carry hundreds of postings soliciting or offering car plates.

"Demand has been very hot recently because winning a car plate through lottery is getting more and more difficult," said a manager at Beijing Sunshine Aomei Asset Management, which says on its website that it buys and sells car plates.

Prices of car plates had surged to about 200,000 yuan each from 120,000 yuan just six months ago, said the manager. Several other car plate dealers also quoted similar figures.

So far, four other cities - Shanghai, Guangzhou, Guiyang and Tianjin - have also implemented car restrictions and more are expected to follow. Some cities use an auction system while others use a combination of lotteries and auctions. Beijing and Guiyang hand out car plates only through lotteries.

If a car owner in Beijing wants to buy a new car, he or she must cancel the old plate and apply for a permit to get another for the new vehicle. These permits allow car owners to bypass the lottery.

While many companies are reluctant to publicise their involvement in the black market, some say the permit system allows them to lease out car plates legitimately.

Wang Shaoyong, a sales manager at a car dealer, said his shop provided buyers with licence permits from a partner firm that had many car plates registered in its name. He said this practice, which he called leasing, was legal.

"Many people desperately want a car, so we're helping them through financial innovation. This is perfectly legitimate," Wang said.

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