Iranian Tire Companies Want Higher Prices

EghtesadOnline: Iran Tire Industry Association has sent a note to the Ministry of Industries and the Consumers and Producers Protection Organization demanding local manufacturers be allowed to raise prices by 30%.

News ID: ۷۴۶۲۹۲

04 December 2018

The association’s spokesman Mostafa Tanha says, “The ministry had agreed to a gradual price increase.” However, authorities are yet to approve the extent of the price increase and when the new prices would come into effect, ISNA reported.

With the local currency losing over 70% of its value against the USD over the past eight months, prices of almost all goods have multiplied several times. Overheads of the tire industry have increased significantly but their factory prices remain unchanged.

Furthermore, scarcity of raw materials has caused a sharp decline in domestic tire production, putting extra pressure on manufacturers, according to Financial Tribune.

Locally-made tires are priced at 5 million rials ($42) a pair in the market while factory prices are less than 3 million rials ($25).

Tanha earlier told reporters that the country’s tire production rate has declined by 25% during the month to June 22 compared to a month earlier.

According to Mohammad Reza Bajestani, an official with the Ministry of Industries, 400,000 tons of tires are sold in the country every year. Local companies on average used to produce 250,000 tons.

According to the Islamic Republic of Iran Customs Administration, importers annually brought in close to 120,000 tons of tires. The balance is contraband smuggled through the porous borders.

Several firms, including the well-known Kavir Tire and Yazd Tire companies, used to produce tires for both heavy and light vehicles in large volumes. In addition to the two, there are 8 other major tire companies. Some 15,000 people work for the tire manufacturing industry.