The recent hike in the factory prices of two major Iranian automakers has increased car prices in the market but dampened demand, according to the vice chairman of Tehran Car Dealers Union.
“With the announcement of the new factory prices of SAIPA and Iran Khodro products, their market prices have increased by 10-15% while those of imported cars surged by 20-25%,” Asad Karami was also quoted as saying by Khabar Khodro.
However, the market player noted that due to the uptrend in prices, transactions remained dull.
Referring to the latest prices of popular car models, Karami said Peugeot 207 is currently priced at 11.6 billion rials ($22,639), Peugeot 206 at 7.6 billion rials ($14,832) and Shahin at 7.5 billion rials ($14,637), which indicate an increase of 500 million rials ($975) to 600 million rials ($1,170).
“Unfortunately, the turmoil in car market, the non-fulfillment of car import promises made by the Ministry of Industries, Mining and Trade and the blocking of customers' advance payments have undermined people’s trust and led to a windfall for profiteers. This is while the promised car import could have helped meet a part of the market demand,” he said.
“If the rise in factory price was accompanied by a surge in car supply by manufacturers and their timely delivery to customers, these would have met the market demand and led to a decline in prices.”
In another report, CEO of SAIPA Mohammad Ali Teymouri announced that the factory prices of the two largest automakers in Iran have increased by 29% on average.
“The increase in domestic car prices was last announced in the ninth month of the fiscal 2021-22 [Nov. 22-Dec. 21, 2021]. The National Competition Council and the Consumers and Producers Protection Organization determine the prices of cars in a process launched about five months before the beginning of the current fiscal year [March 21],” he added.
Teymouri noted that the two organizations based the new price on the first six-month audit reports of Iran Khodro and SAIPA.
MIMT Outlines Strategies to Regulate Automotive Market
The Ministry of Industries, Mining and Trade has devised strategies for the automotive industry in the new Iranian year (started March 21) to set production records and regulate the market.
“The first step of the car reform plan is to boost the production of Iran’s major carmakers, which is possible by adjusting [read increasing] the prices of domestic products,” Abdollah Tavakkoli Lahijani, the head of the Industries Ministry’s Automotive Industry Office, told IRNA.
“Car production exceeded 1.3 million units in the fiscal 2022-23 after four years, wherein production was around 800,000 cars per annum and incomplete cars had piled up in parking lots,” he said.
“We plan to break the country’s car production record this year and reach the production of more than 1.6 million units.”
The official noted that after the implementation of the first step, which was aimed at increasing production, in the second step, the focus will be on the development of nine high-quality domestic products this year.
“Along with the resumption of imports and the clarification of supply status in the national online car ordering portal, the country's car market is expected to become more competitive,” he said.
“Expanding car supply and making prices real by increasing the factory price will eliminate false demand in the car market and boost car delivery.”
Lahijani stated that paying attention to the design of new domestic products is among the ministry’s development plans.
“The root cause of inefficiency in the country's automotive industry should be addressed, which is the lack of attention to the design and development of local products in the value chain of domestic car manufacturers,” he added.
The official explained that due to the low presence of knowledge-based companies in this industry, domestic car manufacturers do not have full control over car production that constantly experiences disruptions.
Lahijani stated that the main goal is to make this industry knowledge-based through the development of local platforms and new products with a national brand.
