Iran: Car Prices Soaring Again

EghtesadOnline: Car prices have been soaring on an hourly basis in Iran over the past few days.

News ID: ۷۴۷۲۲۳

04 May 2019

Vexed by the raging prices, Iranian parliamentarians have censured local car companies and government officials.

Nader Qazipour, who represents Urmia’s electoral district in Majlis, told ICANA, “If car prices are not controlled, the parliament will impeach the industries minister.”

This is not the first time MPs are calling for the impeachment of Industries Minister Reza Rahmani. The government body is in charge of regulating the car market, according to Financial Tribune.

Amir Khojasteh, an MP from Hamedan, last week was quoted as saying by local media, “In a meeting with lawmakers last week, the industries minister promised to propose measures for curbing car prices. If he fails to deliver, he will be impeached.”

Khojasteh declared that the Industries Ministry is hand in gloves with car companies and dealers.

“It should take action and control both the market and prices. The government has, indeed, created an environment in which dealers and profiteers are thriving,” he added.

In the coming days, the minister is to meet members of Majlis Article 90 Commission to find ways of regulating the unending turmoil in the domestic auto market.

Idling Officialdom

On Monday, Abdollah Rezaian, another parliamentarian, told ICANA, “Auto dealers are having a field day while officialdom sits back and does nothing.”

The MP from Mazandaran Province said, “Prices are changing by the hour, which has created a state of chaos in the market.”

Nasser Mousavi, an MP from Isfahan Province, noted that car prices have jumped to unprecedented highs, while the quality of vehicles has declined.

He added that whenever there is a slightest change in Iran’s forex market, car prices increase.

“Car production in Iran is not so closely linked to imports, which carmakers try to make us believe. Raw materials used in the production of popular vehicles are procured locally,” he said.

According to Mousavi, car companies are using forex market volatilities as a pretext for jacking up prices.

In the past few months, the national currency rial lost some 70% of its value.

At present, forex rates change in Tehran’s market by the hour. On Wednesday morning, the USD traded at 142,000 rials in Tehran.

Seemingly angered by the chaotic market, Mousavi said, “The Industries Ministry and Consumer and Producer Protection Organization should immediately take action for calming the messy market.”

Mohammad Reza Tabesh, who represents Ardekan in the parliament, said, “The recent price hikes are unacceptable.”

Tabesh mostly blames government officials for their inaction in controlling the market, calling on his peers to initiate an investigation into the issue.

Latest Price Hike

The cheapest vehicle in the Iranian market is SAIPA’s small car named Pride, which is now sold for 550 million rials ($3,870) after a 50-million-rial ($350) price hike over the past week.

Another model made by SAIPA, Tiba 2, changes hands for 620 million rials ($4,360). The same car would not have fetched 570 million rials ($4,000) a week earlier.

Vehicles made by SAIPA’s archrival Iran Khodro (IKCO) have also observed a sharp hike in prices during the same period.

A face-lifted version of Peugeot 405, locally known as Peugeot Pars is now traded at 1.1 billion rials ($7,750), indicating a 10% price hike.

Peugeot 206 made by IKCO is sold for 1.2 billion rials ($8,450), which could be bought for 940 million rials ($6,610) a few days earlier.