The average price for a private auto license in Shanghai—6,000 available this month—dropped to the lowest point this year, to 26,385 yuan (US$3,253).

Shanghai is the only city in China that sets a quota on private auto plates each month and has adopted auto plate auctions since 1994 to control the number of vehicles on the road.

The drop occurred despite a high number of bidders and a sharp decline in the number of plates available.

Usually, less than 6,000 auto license plates are available in each monthly auction, while the average price has been 35,000 yuan this year.

At Saturday's auction, the average winning price decreased for a second consecutive month, 2,542 yuan less than last month.

The lowest price to buy an auto plate also dropped to 25,200 yuan, compared with 26,500 yuan a month earlier, according to Shanghai International Commodity Auction Co.

A recorded number of 11,167 bidders took part in the auction for 6,000 plates, 700 plates less than last month. Industry observers said it was mainly driven by the falling average price.

"I think the bidding was less controlled by auto dealers, leaving more plates for individual bidders, who prefer the price as low as possible," said Zhu Junyi, an analyst from Shanghai Information Center Auto Industry Research Office.

Authorized auto dealers are allowed to bid on behalf of their customers, and usually their cumulative high bids will affect the price.

"The decline of the available plates has nothing to do with the government's hope to raise the plates' price," said Zhu.

He said the number of auto plates to be auctioned throughout the year was set at the beginning of the year, and could be adjusted