Economy, Auto
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Car Importers Need to Become Competitive

Car Importers Need to Become CompetitiveCar Importers Need to Become Competitive

In the new atmosphere emerging in the wake of the July nuclear agreement between Iran and six world powers, car importers need to become more competitive to be able to survive in the domestic market.  

Managing director of Toyota's official representative company in Iran believes that joint investments between domestic producers and international carmakers would transform the market of imported cars.

"Under the new circumstances, importers need to change their attitude toward the domestic market and become more competitive," Akhbar Khodro quoted Abdolreza Fahimi as saying on Monday.

"Although the nuclear deal has not produced any impact on the final price of cars so far, customers expect reduction of prices in future, a fact that will certainly influence demand."

Although there has been no change in car import tariffs, some domestic producers and importers of Chinese cars have lowered prices.

In a recent roundtable on Iran's television, Davoud Mirkhani Rashti, the head of Competition Council, declared that in order to offload the previous year's model, a carmaker has offered a discount of up to 200 million rials ($5,800 at the open market exchange rate).

While international car producers are waiting for the lifting of sanctions to enter the Iranian market, Fahimi said Toyota has no worries about losing the market.

 "The recession in the imported car market (in recent years) was the product of poor economic conditions," he said, adding that once economic growth is realized and people's purchasing power increases, demand for domestic and imported cars would rise.  Fahimi said the increase in car imports would not interrupt the market, rather, "it would lead to emergence of new competitors in the market", which would probably help lower car prices.

Iran is reportedly the biggest car market in the Middle East, selling 900,000 passenger units last year and building 1.1 million.

 

Financialtribune.com