The auto industry faces scrutiny on multiple fronts as car prices spike in Iran, with the bullish market observing a 10% price increase only in recent weeks.
The industry seems to be stuck in a witch's brew comprised of raging inflation, wobbly foreign currency rate and human avarice.
Public outrage over the rising prices ignited a media firestorm, which goaded the Iranian Parliament to summon Iran Khodro and SAIPA's CEOs as well as Industries Minister Mohammad Shariatmadari to present their arguments, local automotive website Asbe Bokhar reported.
According to lawmaker Nader Qazipour, the two major manufacturers have hoarded products in storage, leading to price increases. "IKCO has stockpiled 30,000 vehicles while SAIPA has done the same with 60,000 units."
Qazipour says carmakers have produced the said vehicles receiving subsidized currency from the government at the rate of 32,000 rials to the US dollar. With the dollar-rial exchange rate unified at 42,000, the carmakers are now hoping to sell the cars at excessively higher prices.
Since last December, the foreign exchange market has been in a state of upheaval as the US dollar exchange rate jumped to unprecedented levels several times before the government of President Hassan Rouhani stepped in and unified the rate at 42,000 rials last month to put an end to the raging market.
May 19, 2018 17:03
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Iran Auto Industry Under Fire Over Soaring Car Prices
While the industries minister says the prices of local cars are not to be raised more than 9.6%, some automotive industry officials are floating the idea of a 30% increase
In face of ferocious criticism, business insiders say considering the excessive volatility in the forex market and the current inflation rate and rising costs of raw material, the expectation for car prices to remain steady is unfair
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