Economy, Auto

Local Auto Companies Allowed to Raise Prices

The SAIPA Pride is inexplicably getting more expensive.The SAIPA Pride is inexplicably getting more expensive.

The government-backed Competition Council that keeps an eye on the prices of local products, including vehicles, has given permission to some local carmakers to increase prices of several models.

Iran Khodro and SAIPA, the two main automakers, are allowed to increase the prices of some models, namely Pride and Tiba (produced by SAIPA) in addition to Samand and several models of Peugeot (produced by IKCO), Tasnim News Agency reported.

The ruling allows SAIPA to increase the prices of Pride and Tiba by up to 1.5%, and gives IKCO space to charge 2.5% to 3% more for its Samand and Peugeot models.

With authorization from the council, 1.5 million rials ($40) will be added to the price of Tiba and Pride which are currently sold for 250 million rials ($6650); Peugeot and Samand models will increase by 4 million rials ($107).

Moreover, imported cars have already become dearer as there is seemingly no control over their prices that are mostly determined by owners of car showrooms and their army of agents.

 Criticism From Chamber

In related news, the head of Industries Commission of Tehran Chamber of Commerce, Abolfazl Roghani, criticized the controversial policy of always “supporting domestic auto production” despite low quality, ISNA reported.

In his opinion “If we are to back local production then we must first oblige our manufacturers to meet the quality requirements.”

Referring to the “unreasonably” high prices of imported models, Roghani said foreign models are sold at 50-70% over and above what they actually cost the in international market, hence “killing the need to compete in and among domestic automakers.”

Imported cars are much more expensive than domestic models due largely to punitive import tariffs that reach up to 100%.

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