State Bodies Gear Up to Regulate Iran Auto Market

EghtesadOnline: Given the recent fluctuations in the auto market as the US prepares to reimpose sanctions against Iran, various executive entities in the country have outlined plans to undo a portion of the harm already done to the sector.

News ID: ۷۸۳۱۲۳

01 July 2018

According to local automotive website Asbe Bokhar, the Consumer and Producer Protection Organization signed a memorandum of understanding on Wednesday for further cooperation with the Headquarters to Combat Smuggling of Goods and Foreign Exchange.

As per the MoU, "cars will no longer be delivered in large volumes to representative offices." In addition, no individual will be allowed to submit presale orders for more than one car over a six-month period, Financial Tribune reported.

"This was not an overnight call by authorities, and major automakers [including Iran Khodro and SAIPA] have agreed to the decision," head of CPPO Mahmoud Navvabi was quoted as saying.

During recent weeks, Iranian carmakers have introduced extensive sales and presales schemes which have calmed the market to some extent. Navvabi points out that the auto market has become more stable compared to 10 days ago, "and it will hopefully continue to do so."

***Tied Hands

While the authorities are pushing ahead with plans to regulate the market, their hands are seemingly tied and they cannot impose their will on the market.

According to Navvabi, the CPPO will not meddle with the exchange of second-hand cars or at what price individual citizens will sell their vehicles.

The organization will supervise the automotive sales right from the production plant up to the market, though by the time an individual purchases a unit, the organization can no longer exert power to determine the price.

He further commented that it will be on people to report violations to the related authorities in charge of the matter.

He pointed to the current shifts in the market as a result of the atmosphere of economic insecurity prevalent in society.

"The upcoming restoration of sanctions disheartened people and aroused a state of anxiety in the market—a condition exacerbated by a group of opportunists."

He also mentioned the ban on importing cars and the expected rise in prices.

The General Inspection Organization of Iran (GIO) is also set to supervise dealings in housing, vehicles, gold coins and foreign exchange to prevent violations in pricing and crack down on racketeering, director of GIO Naser Seraj told Azad News Agency.

One can easily check the accurate price of imported vehicles by contacting 124.ir which is a notifying system backed by "Tazirat" Organization (a judiciary-affiliated ombudsman dealing with trade offenses). In case a distributor overprices the vehicle, customers can report the act through 124.ir as well.