Competition Council Move Scrutinized

Local automakers were recently given the go-ahead by the Competition Council to raise prices and one lawmaker says he would keep an eye on their actions.

The so-called Competition Council is a government-backed body that monitors, and in some cases sets, prices of local products including cars.

Mohammadreza Najafi, a member of the Parliament’s Industries and Mines Commission said the oversight body would pay particular attention for “possible mishandling” of the new pricing structure, according to ISNA.

“If the Majlis comes to the conclusion that the increase in car prices is due to poor management, we [Industries and Mines Commission] will submit an inspection proposal to parliament to look into the matter,” he said.

Automakers must submit a comprehensive report of their production costs if they want to avoid possible stern action by the Majlis, he said.

His remarks follow reports by some automakers, including Iran Khodro and SAIPA that they will increase their prices in the coming month.

Najafi noted that the car companies were allowed to increase the price of several products without any explanation as to why car buyers should have to fork out more.

However, he added “the Competition Council is supposed to go through all the relevant documents, including a full review of expenses, from the companies before issuing price-raising permits.”

Carmakers annually increase prices by a few percentage points, however, due to the poor reporting this time round, parliamentarians are questioning the logic behind the move.

The recent 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).