Economy, Auto

Auto Sales Unmoved by Nuclear Accord

Auto Sales Unmoved by Nuclear Accord
Auto Sales Unmoved by Nuclear Accord

Prices of locally produced cars and pickups will not reduce, said the minister of industries, mining and trade.

Mohammad Reza Nematzadeh added that following the historic nuclear agreement between Iran and the world powers, trade volumes will surely increase and the auto industry will receive a boost, Mehr News Agency quoted him as saying.

He clarified that prices of imported cars may reduce if the US dollar drops against the rial, however, this will not affect the prices of cars made inside Iran "for the Competition Council is responsible for setting prices of locally manufactured vehicles".  

The nuclear accord signed by Iran and P5+1 (the US, Britain, Russia, China and France, plus Germany) on July 14 in Vienna, Austria, will remove sanctions against Iran in exchange for it agreeing to temporary constraints on its nuclear program.  

All economic, financial and banking sanctions on Iran will be terminated the day the deal comes into force, believed to be in January. Economists believe this will enhance the value of the local currency rial against the US dollar and improve Iran's economic situation.

Despite the fact that the news of nuclear accord has jolted many local markets, the auto market seems to have remained unmoved. Demand for vehicles is on a steady decline even as prices of both locally produced and imported vehicles continue to drop.

According to Donya-e-Eqtesad, the current stagnant state of the auto market has raised concerns among auto experts.

Some pundits are of the opinion that it is too soon to judge and the effects of the deal will only manifest in the long run.    

Others believe the auto market has failed to meet customers' satisfaction and buyers expect prices to drop, therefore the news of the nuclear deal has made potential customers to delay purchasing vehicles and, consequently, the market has remained idle.