Car Deals Put on Hold

EghtesadOnline: Following a total ban on car imports as per a directive signed on June 20 by the industries minister, vehicle prices have once again hiked in Iran’s market, with many putting their plans to purchase a car on hold.

News ID: ۷۸۳۱۲۶

01 July 2018

Head of Tehran Auto Dealers Association Saeed Motemanni told Asre Khodro that since Saturday and with the implementation of a sweeping import ban on many commodities including vehicles, the car market has seen zero trades and has become stagnant.

The suspension of car imports since Saturday which heralds an imminent scarcity of foreign-made vehicles has driven prices to unprecedented highs, with a knock-on effect on the costs of locally made cars, according to Financial Tribune.

Motemanni says, “Foreign vehicles have turned into a rare commodity and their owners set prices as they deem fit.”

Asked about the domestic market, Motemanni stressed that the recent government directives have also impacted local vehicles, pushing up prices and consequently rendering the market moribund.

Turbulent Market

Motemanni says money-grubbing car dealers are taking advantage of the chaotic times and charge any price they wish. He added that “last week, the market was starting to show signs of improvement, but from Saturday on, almost no sales or purchases have been made.”

Motemanni was referring to SAIPA and Iran Khodro’s extensive sales schemes, which had caused a drop in inflated prices by increasing supply.

Just as the auto market was starting to recover from a month of raging prices, the administration’s measure to ban vehicle imports outright gave rise to a reversion to stagnation.

Motemanni says the resolution lies with car manufacturers and they need to increase and sustain supply to help mitigate the situation and bring much-needed calm to the market.

Market observers are however of the opinion that the auto industry is beyond quick fixes and the back-to-back shocks inflicted on the market make it a lengthy struggle to recuperate.