A large number of applicants have withdrawn from the national online car ordering portal, Esalecar.ir, in just 24 hours.
According to Mehdi Taqaddosi, the portal’s manager, the reduction in domestic car prices because of the decline in foreign exchange rate is the main reason behind this lack of interest, IRNA reported.
“One of the private sectors’ car producers announced on June 12 that only 10% of car applicants of this company deposited the rest of the car purchase money in the first stage of the integrated sale plan and the remaining 90% have quit,” he said.
“The applicants approached their banks and withdrew their money; they didn’t wait for the announcement of results on June 14.”
He said some of the private sector’s assembled cars are being sold in the market at a price lower than the factory prices and this issue, along with the unattractiveness of registered vehicles, has accelerated the trend of withdrawal.
While stating that the number of applicants in the second phase of the integrated sale plan was more than one million people, Taqaddosi said the precise number of withdrawals is not known, but “we will inform as soon as it becomes available.”
In the past few days, it was reported that 20-50% of applicants of domestic and assembled cars in the national online car ordering portal had retreated from the first phase.
Experts believe that this indicates that most people had participated in this plan to earn a profit, but pulled away when the price gap between the factory and market prices declined.
The prices of assembled cars in the market have fallen considerably in the past few days.
The price of Bahman Motor’s Dignity Prestige fell by 950 million rials ($1,990) on June 12. It dipped by 900 million rials ($1,885) for Arian Motor’s Lamari Eama, 800 million rials ($1676) for Bahman Motor’s Dignity Prime, 900 million rials (($1,885) for Chery’s Tiggo 8 Pro and 900 million rials ($1,885) for Tiggo 8 Promax IE.
Also, the market price of Kerman Motor’s cars (except JAC Motors’ S3), Respect and Inroad vans (from Bahman Motor), X55 Pro, Arizzo 5, Arizzo 5 Sport, Arizzo 6 Pro and Tiggo 7 IE, Ryne R3 and Suba M4 is lower than the factory price of these products.
The prices of other assemblers' products have also shrunk from 1,000 million rials ($209) to 700 million rials ($1,466).
Domestic Car Market in Recession
Transactions in the domestic car market are currently 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.
