The High Council of Securities and Exchange has decided to resume selling cars via the Iran Mercantile Exchange after the Industries Ministry suspended it last month.
According to Mohsen Alizadeh, a member of the HCSE, the decision was made in coordination with Industries Ministry, the Securities and Exchange News Agency reported.
In June the ministry said auto sales via the IME was incompatible with rules designed to regulate the chaotic auto market.
The ministry referred to the huge gap between supply and demand in the auto market, stating that offering cars with high demand but short on supply at the IME had pushed up prices.
It also argued that offering autos at the IME had led to the emergence of multiple prices (factory rates, the IME price and the free market price), which was unhealthy and to the determent of the market.
“So long as supply is way below demand, it is highly likely that a third market will emerge where auto prices are over and above the factory and IME rates,” the ministry said earlier.
At the last meeting of the council on Tuesday, the ministry backtracked and agreed to continue selling selected brands at the IME.
Elaborating on the HCSE meeting, Javad Jaharomi, the IME deputy for supervisory affairs, said all the offers will be in coordination with the Industries Ministry.
“It was decided to resume the sales by offering a particular class of cars and obliging manufacturers of that class to make offers”, he was quoted as saying Tasnim News Agency.
As per procedures, cars that are not subject to pricing mechanisms by the government were offered at the IME.
The ministry’s move to suspend the practice was censured by capital market authorities, shareholders of auto companies and government officials.
Observers rejected the move as “against transparency,” which would undermine efforts to curb the government’s arbitrary intervention in the auto market.
There have been persistent calls by capital market authorities and shareholders on the government to rethink its obviously dysfunctional policies of imposing prices on goods made by listed companies and let the market decide.
They argue that price caps set by the government are usually lower than the real prices and to the detriment of manufacturers and shareholders.
In the past several years, the so-called Competition Council has been in charge of setting prices of a number of domestically-produced goods.
Arbitrary pricing by the government and not let prices be determined by demand and supply mechanisms are seen as unhelpful, unproductive and unwanted.
