Transactions in the domestic car market are limited to passenger cars priced under 20 billion rials ($40,746), according to an automotive expert.
“Currently, the market is in recession and cars worth 20-30 billion rials [$40,746-$61,119] are not being sold in the market at all,” Erfan Sayyah was also quoted as saying by the Persian automobile daily Donyaye Khodro.
"The drop in the prices of assembled cars following the letter of the National Competition Council and the market recession have caused prices to return to the rates of the 11th month of the last fiscal year [Jan. 21-Feb. 19, 2023],” he added.
He noted that one of the reasons that triggered the price hike was the changing public perception that a car had become a capital good instead of being a consumer good.
"But under the current market condition, we will gradually see cars from the parking lots [of automakers] enter the market and become cheaper, even if the foreign exchange rate were to remain at the current rate," he said.
Commenting on the impact of secondhand car imports on the market, Sayyah said as soon as imported cars enter the market, they will reduce the inflation in the market, which will cause prices to fall further.
“The downtrend in car prices after several years of uptrend has caused many to sell their cars and it seems that capital is leaving this market,” he added.
According to statistics, the domestic vehicle output reached 1.4 million in the last fiscal year (ended March 20, 2023) after four consecutive years when the vehicle output was less than one million units.
“It seems that the production of domestic cars can reach 1.7 million units in the current fiscal year. Experience shows that when the output exceeds 1.5 million units, car manufacturers face a challenge in selling their products and have to turn to plans such as leasing and installment sales,” he said.
The expert noted that many automotive experts predict that carmakers will launch new sales plans from the sixth month of the current fiscal year (Aug. 23-Sept. 22).
Asked about the effects of the launch of the national online car ordering portal (Esalecar.ir), he said the integrated system has made it possible to better respond to people’s demand for one million cars.
“With the start of the wide supply of cars, prices in the market have started declining, such that prices fell by 10-15% and the prices of assembled cars decreased by 2-4 billion rials [$4,074-$8,149],” he said.
Sayyah said the main factor behind the fall in prices is the continuous and stable supply of cars by automakers to the market.
Vehicle Output Surges by 48%
The production of domestic vehicles (including commercial and passenger cars) reached 193,437 in the first two months of the current fiscal year (March 21-May 21), registering a 48% growth compared with the corresponding months of the previous year, according to the Ministry of Industries, Mining and Trade’s Automotive Industry Office.
Passenger car output hit 165,874 during the period under review, registering a 45% rise compared with the previous year.
The output of pickup trucks reached 21,404 vehicles, registering a 58% growth compared with the previous year.
Van production amounted to 713 units during the period ending May 21, up 1,108% when compared with the same period of the previous fiscal year.
Minibus, middle bus and bus production stood at 381 vehicles, showing a year-on-year rise of 48%. The minibus and middle bus output amounted to 199 (up 35%) and bus production hit 182 (up 65%).
The production of heavy vehicles hit 6,065 vehicles during the period to register a 95% increase compared with the same period of last year.
A total of 38,067 vehicles were produced by the private sector, registering an 80% YOY increase.
The sector’s passenger car production stood at 29,679 vehicles during the period, registering a 75% growth.
Pickup truck production by the private companies hit 4,405 to register a 92% increase.
Private automakers only produced one van during the period, registering a 98% decline when compared to 59 units in the corresponding period of last year.
Private sector automakers produced 199 minibuses and middle buses during the period, registering a 35% year-on-year growth.
A total of 64 buses were produced by this sector to register a 42% increase compared with the same period of last year.
The output of heavy vehicles amounted to 3,719 units during the period, to register a 138% YOY growth.
Also, A total of 117,318 were produced by domestic producers in the second month of the current fiscal year (April 21-May 21), registering a 42% increase compared with the same month of the year before.
The production of passenger cars during the month stood at 98,942, registering a 38% growth compared with the previous year.
The output of pickup trucks reached 13,433 vehicles, registering a 59% increase year-on-year.
Van production amounted to 472 units, up 1,867% when compared with the same month of the previous fiscal year.
Minibus and middle bus output hit 137 vehicles to register a 47% YOY growth.
The production of bus production reached 119, registering a 78% increase compared with the corresponding period of last year.
Heavy vehicles’ output hit 4,215 vehicles, registering a 99% growth year-on-year.
The private sector produced 22,923 vehicles during the month to register a 77% growth compared with the same month of the previous year.
Passenger car output of private automakers hit 17,548 vehicles, registering a 77% growth.
The sector’s pickup truck output stood at 2,641, registering a 55% increase, which did not manufacture any vans in the month.
Private companies produced 137 minibuses and middle buses to register a 47% year-on-year growth.
A total of 34 buses were manufactured by these companies to register a 49% decline compared with the corresponding month of last year.
The output of heavy vehicles amounted to 2,563 units during the month, registering a 128% YOY growth.
