Economy, Auto

Vehicle Pricing Disputed

Vehicle Pricing DisputedVehicle Pricing Disputed

During the last meeting of Iran’s Competition Council, it was decided that the council will remain responsible for setting vehicle prices as long as the local auto industry remains dominated by a few major companies, said an observer member of the council.

Ali Madadi added that some council members had raised concerns over the fact that the Ministry of Industries, Mining and Trade was not implementing the council’s ratifications.    

“To prevent legal infringements, a specific mechanism will be drawn up so that the ratifications approved by the council will be properly implemented,” Fars News Agency quoted the official as saying.

The official further said legal aspects concerning the quality of vehicles manufactured in Iran will also become stricter, though he did not discuss the method of enforcement.

“As a result of the lifting of western sanctions on Iran over its nuclear energy program, the cost car parts will drop,” he said.

Madadi noted that car pricing schemes will be revised and the prices of vehicles will decrease.

“Before the lifting of sanctions, auto parts had to be imported via intermediaries to counteract the sanctions. This will no longer be the case. Therefore, prices are likely to drop.”

Speaking to Tasnim News Agency, Reza Shiva, the head of the council, added that the organization will continue to dictate the prices of imported cars with engines no larger than 2 liters.  

Pointing to the stagnant state of Iran’s auto market, the official said the possibility of a car price hike is slim, which will largely depend on the effects of new foreign auto deals.

 “Only then can we make final decisions about vehicle prices,” he said.

The latest decisions of the Competition Council have been released at a time when Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh announced that the prices of cars produced in Iran following the latest automotive contracts shall be based on supply and demand.

Stressing that the government will not set the prices, the minister said currently four major vehicle manufacturers are active in Iran—Kerman Motors, Pars Khodro, IKCO and SAIPA—and “there is no oligopoly in the auto industry”.

The minister made the statements in a television interview, but did not highlight the fact that the last three companies dominating the market are either fully or partially state-owned.