Following a sharp surge in car prices, local authorities are pushing online sales platforms to remove adverts carrying price tags. Now the judiciary says a new mechanism has been devised for regulating online vehicle price listing.
Reza Olfatnasab, the head of E-Commerce Union, earlier wrote on Twitter that unionists, e-retailers and judiciary authorities have held talks on how best to stabilize the online auto market.
Representatives from online sales platforms, Bama, Divar and Sheypoor, were present at the talks.
Javad Javidnia, attorney general’s deputy for cyberspace, outlined the latest strategy for regulating the online market, IRNA reported.
According to Javidnia, a price range for each vehicle is to be set in collaboration with the E-Commerce Union and Iran Auto Dealers Association.
Auto sale websites will be allowed to only list prices that are 5% higher or lower than the set benchmark.
Earlier, following a remarkable jump in car prices, the judiciary called on Internet-based platforms to remove all car adverts that included prices.
However, Javidnia believes that banning car price listing on well-known websites would not solve the problem. He notes that if prices cannot be published on local websites, people would turn to foreign social media platforms.
“For now, we have called on the local platforms to remove adverts posted by profiteering dealers that suddenly jack up prices sharply,” he said.
According to the official, a mechanism is also to be devised for authenticating the identity of auto sellers on online platforms.
Media Frenzy
Over the past three weeks, car prices hiked north of 30% in Iran. Following the sharp jump in prices, local media and officials blamed auto dealers and online marketplaces.
In the latest round of media frenzy over skyrocketing car prices, online marketplaces were branded as “dealers’ lair” by local news outlets for jacking up prices on an hourly basis.
Reportedly, profiteering dealers create numerous accounts on online sale websites like Divar, Sheypoor and Bama for posting several ads for a single vehicle in which the same car is priced differently.
Then they fake sales and repost adverts about the same car again with higher prices. Unaware of the deceitful process, customers believe that prices are rising and rush in to buy vehicles at whatever price they can lay their hands on.
Last week, following the judiciary’s push and in order to control the scandal-smeared auto market, online services cracked down on “suspicious car adverts” by removing them from their platforms. They also barred users from posting ads that included prices.
Javidnia now says the platforms can once again publish adverts, including car prices. However, he called on them to remain vigilant and not allow market manipulators to abuse their services.
Chaotic Market
The cheapest vehicle in the Iranian market is SAIPA’s small car named Pride, which is now sold for 550 million rials ($3,870) after a 50-million-rial ($350) price hike over the past week.
A sedan model made by Iran Khodro, Samand, changes hands for 1 billion rials ($6,800). The same car would not have fetched 860 million rials ($5,850) a month earlier.
While authorities blame online platforms and dealers for the high prices, observers believe that economic upheavals have caused volatility in Iran’s auto market.
Since Washington imposed new sanctions against Tehran last summer, car prices—just like the price of every other commodity—have also witnessed an upward trajectory.
As the import of raw materials and auto parts comes under increasing strain, car production plummeted sharply in Iran while demand for cars has increased.
In the last fiscal year (ended March 20, 2019), a total of 955,923 cars and commercial vehicles were produced in Iran, indicating a 37.8% year-on-year decline. The disproportionate supply and demand have further added fuel to the market turmoil.
With state authorities persisting on their wrongheaded policy of cracking down on market players instead of addressing the fundamental issues roiling the sector, analysts are of the opinion that car prices will continue to soar in Iran.
