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Market to Determine Prices of 2 Cars

Market to Determine Prices of 2 Cars Market to Determine Prices of 2 Cars

The Competition Council on Monday declared that it will no longer be responsible for setting the prices of two cars, the head of the council said.

Reza Shiva added that critics of the Competition Council's price-setting strategies believe car prices would drop if the council is no longer responsible for setting them, ISNA reported.

Analysts believe the prices of two local made cars, namely Iran Khodro Company's Dena and Tondar 90 (L90 or Dacia Logan), which will no longer be set by the council, would not increase.

A market expert said that since the auto market is currently in a stagnant state and there are several other cars in the same price range, prices of the two cars will not change.

According to Alireza Pourhassani, the main competitors of the L90 automatic include the automatic versions of Sandero, Brilliance, JAC and Ario.     

Models of Peugeot Persia, Pars Tondar, Ario, JAC, Voleex and MVM can also compete with Dena. Therefore, if the prices of the two models in question increase, customers would logically choose from other cars available in the same price range.

He stressed that the auto market is not ready for a hike in prices and the local carmakers are aware of this fact.  

Ahmad Nematbakhsh, secretary of Iran's Auto Manufacturers Association, noted that the pricing of cars by the Competition Council poses a major obstacle.

"Foreign investors have agreed to work in Iran on condition that they would be allowed to change the prices of cars when necessary," he said.

Nematbakhsh added that if carmakers hike the prices too high, customers would not buy them and will instead choose other alternatives.

Currently, Dena and L90 are being sold for 434 million ($12,400) and 490 ($14,000) million rials respectively.

Financialtribune.com