Economy, Auto

3 Iranian Car Producers Hike Prices Unexpectedly

The price of Brilliance H220 has increased by 2.8%  in recent months.The price of Brilliance H220 has increased by 2.8%  in recent months.

Three major Iranian car manufacturers have recently hiked prices unexpectedly.

This has been done despite the repeated warning of experts that the auto market is not ready for price hikes.

SAIPA, Iran’s second biggest auto manufacturer, Kerman Motors and Modiran Vehicle Manufacturing Company have raised the prices of several models recently, Eghtesad News reported.

“This new development follows the long-lasting stagnation in Iran’s auto market,” said Gholamhossein Qasemi, deputy director of Iran’s Auto Dealers Guild.

With the lifting of western sanctions against Iran, several deals were signed with international automakers and many expected a significant boost to Iran’s auto sector as well as a considerable decline in prices.

However, against all commonsense approach and analysis, the three automakers recently hiked prices.

A possible explanation might be the decline in production rate during the auto industry’s mid-summer recess.

SAIPA had recently said it achieved a significant rise in both production and sales.

Iran’s Ministry of Industries, Mining and Trade has also raised import tariffs for Chinese auto parts.

MVM and Kerman Motors are producers of complete or semi-knocked-down Chinese vehicles in Iran. Therefore, the rise in prices could be linked to the implementation of new tariffs.

The ministry might have hiked the tariffs to support Iranian automakers under the new joint venture agreements with foreign companies such as Peugeot, Citroen and Renault.

Another possible outcome, which the ministry might be seeking, could be to motivate Chinese automakers to follow the example of French automakers in investing in Iran.

Two of the main preconditions for foreign automakers to invest in Iran’s auto industry are to manufacture 20% of the vehicles locally and also export 30% of the vehicles produced.

The models listed in the chart are the ones to have been recently slapped with a hike in prices.