In 2009 China passed the United States to become the world's top country in terms of motor vehicle manufacturing and sales. One factor behind automobile industry development is motorization. Motorization is perceived as a synonym for an affluent life, but as one can see from the examples of developed countries, it has brought about grave environmental problems in urban areas. Improving one's understanding of motorization is important for considering how to deal with environmental problems. This paper discusses the trend in motor vehicle ownership by examining its historical changes since reform and opening, using Shanghai as an example. The reasons for choosing Shanghai are that the city has a policy that is unusual (illegal from the government's point of view) for China on personal vehicle ownership, and that the city government maintains a license plate auction system. This paper is primarily an analysis of how this system influences the trend in vehicle ownership. Thanks to the system's effectiveness, Shanghai has kept the level of ownership per 1,000 people at a low level.
