Iran: New Car Prices in Sight

EghtesadOnline: Authorities are set to ratify new car prices for models costing under 450 million rials ($10,700) in the early days of June.

News ID: ۷۸۲۷۷۲

30 May 2018

Head of the Competition Council Reza Shiva said on Tuesday that the authority will receive information on all factors constituting the price of vehicles and work out the new fees before June 5, reported the Persian economic daily Donya-e-Eqtesad.

Central Bank of Iran is to communicate the sectoral inflation rates of the year which ended in March 2018 to the council, which they will subsequently factor in to determine the prices.

The Competition Council is a state body that keeps an eye on many domestic products, including cars, and sets prices for some goods including vehicles costing 450 million rials or lower, Financial Tribune reported.

Cars priced above the said cap are not subject to the council regulations and the market determines their prices.

Stagnant Market

Shiva did not address the latest unauthorized price hikes reported by market insiders and censured by the general public both as “horrendous and illegal”. Prices have been jacked up by car dealers and some makers by 6-22% only in the past few weeks.

Makers say recent foreign currency fluctuations, salary raises and the upward trend of raw material prices have contributed to the spike, leading to a stagnant market.

Market insiders say customers refuse to purchase vehicles, and the few transactions that are carried out mostly involve second-hand cars.

Increasing Pressure

Shiva says the council has also assessed the quality of locally manufactured vehicles and will call a gathering as soon as they receive the inflation rate from the CBI.

He added, “We have held several meetings with carmakers and they have presented their documentation to the council.”

Industries Minister Mohammad Shariatmadari has already given the green light to a 9.6% increase, making the public wonder whether the council’s figure will exceed that of the minister, or whether the parliamentary probe into the soaring prices will produce any result.

This week, the Iranian Parliament established a commission to investigate the exorbitant prices, during a meeting with carmakers, parts makers, importers and the industries minister’s representatives.

Their second meeting will be held next week. The parliament will also put to the vote a bill that allows lawmakers to monitor and regulate the auto sector in the coming week.