Iranian car manufacturer SAIPA managed to pre-sell 50,000 vehicles in less than two days, a testament to the public’s rush to turn their cash into safe-haven assets in view of the galloping inflation.
Starting from Wednesday at 10 a.m. local time, the second largest Iranian carmaker launched an online pre-sale of 50,000 of its Pride, Tiba and Saina models through its website. All the vehicles on offer were pre-sold in less than 38 hours, the carmaker reported.
SAIPA has released interesting statistics about its sale, which suggest 63% of purchasers were male and 37% were women.
Examining the data from a province by province perspective, the data shows that the majority of buyers were from Tehran and Alborz provinces (29%).
Following Tehran and Alborz are Khorasan Razavi (9%), Isfahan (8%) and Fars (7%).
The pre-sale was met with overwhelming enthusiasm on the part of the public, whose surging demand for cars has driven car prices to unprecedented highs, creating strong demand even for low-quality vehicles.
The extended sale scheme aims to soothe a volatile market disrupted by the increasing price of raw materials, hampered by defective government policies and targeted by US sanctions due to auto sector’s significant share in Iran’s GDP and employment.
According to Industries Minister Mohammad Shariatmadari, the auto industry has a 3.5-4% share in Iran’s GDP and 12% of the Iranian workforce is employed in the key sector. The annual turnover of the auto industry is estimated at $12 billion.
As SAIPA CEO Mohsen Jahroudi later said, the sale has already impacted the exorbitant car prices, Saturday’s open market price lists indicate that the cheapest SAIPA model Pride currently exchanges hands at 375 million rials ($2,866), down 8.5% from two days earlier.
It merits mention that the vehicle’s price in the open market is still significantly higher than the factory price which is 227 million rials ($1,746).
Access Denied
SAIPA’s website was already down at 10 a.m. on Wednesday when the sale was supposed to start.
Frequent complaints from customers who have been denied access to the website prompted SAIPA to issue a press release, saying that 6 million people have accessed the website simultaneously, which led to the repeated crashes.
“The sale has been phased and every 15 minutes there is a 10-second window for those already viewing the website to initiate an online preorder. We ask for the public’s patience.”
The majority of potential buyers were welcomed by a message that asked them to visit the website at a later time.
The sale ended at 1:45 p.m. local time on Thursday, with the company selling 50,000 in 38 hours.
In response to rumors that the company has increased prices for a second time in one year, Jahroudi said, “SAIPA’s products are priced in accordance with a directive issued by the Competition Council. We have not raised our products’ prices and have not received any new directives.”
The Competition Council is a state body in charge of price-setting for a range of products including under 450 million rials ($3,461) vehicles.
Change of Priorities
The sale takes on a wider significance when the car models on sale are examined, pointing to a change of priorities in light of new economic conditions.
SAIPA put on sale two versions of Pride, SAIPA 131 and SAIPA 132, Tiba and Tiba2 as well as Saina. Moreover, they sold thousands of the Pride pickup SAIPA 151 and the Nissan pickup.
According to the Iran Standard and Quality Inspection Co’s report for the month beginning on July 23, all versions of Pride merely acquire two stars, and the Nissan pickup models a lonely one star out of five.
For years SAIPA has been under mounting pressure to halt the production lines of its Pride models due to the vehicles’ low quality.
With the dollar exchange rate causing a sharp drop in the value of the national currency, the quality of purchased vehicles is no longer a public concern.
