Iran Khodro Prices Keep Rising

EghtesadOnline: Iran Khodro on Sunday published a new price list for five models including the popular hatchback model Peugeot 207i and the locally-designed Dena+, jacking up prices by a hefty 50% for four models and reducing the price of one car by 5%.

News ID: ۷۸۴۴۲۷

25 December 2018

According to the list published on IKCO.ir, the price of the hatchback Peugeot 207i with manual gearbox has jumped from 470 million rials ($4,600) to 700 million rials ($6,860).

The company has raised the price of Dena+ from 530 million rials ($5,200) to 760 million rials ($7,450).

IKCO has also increased prices of two Chinese models made in Iran by 50% and 41%. The Dongfeng H30 Cross is sold 750 million rials ($7,350), up 50% from 500 million rials ($4,900). The price of Haima S5 has also increased 41% from 980 million rials ($9,600) to 1.38 billion rials ($13,530), according to Financial Tribune.

The company cut the price of a face-lifted version of Peugeot 405 with automatic gearbox locally known as Peugeot Pars from 830 million rials ($8,140) to 790 million rials ($7,740).

This is while the price of the same car was raised from 540 million rials ($5,300) to 830 million rials ($8,140) last week -- a whopping 54%.

Disregarding the company’s questionable advertisement tactics about “cutting prices”, simple arithmetic shows that the  Peugeot Pars costs 46% higher compared to a few weeks ago.

Chaotic Market

Over the past few months and after the US imposed new sanctions Iran’s economy started to falter and the national currency lost 60% of its value in the past eight months. However, the rial has stabilized in recent weeks as the central bank strives to control the forex market with stringent rules and high penalties for those who break the currency rules.

On Monday the greenback was sold for 102,800 rials in Tehran. It fetched 160,000 to 180,000 rials in summer when the rial tanked and currency prices jumped to unprecedented highs.  In March the USD had a hard time getting 42,000 rials.

With inflation galloping and the currency market in chaos, desperate people wanting to change their shrinking rial into safe-haven assets rushed to the lucrative auto market. This was where the avaricious carmakers and their agents came in and resorted to every trick in the book to make easy money.

Fast running out of economic vision and new ideas, and in a move reportedly aimed at “managing” the chaos in the auto market, the government gave the green light to carmakers to set factory prices 5% lower than the market value to get rid of the army of middlemen demanding car prices as never seen before.

Industries Minister Reza Rahmani often claims in his press briefings that “the controlled increase in prices” would help manufacturers boost production. The higher factory prices plus increase in supply is supposed to pull down prices.

On Monday the market price of Dena+ sedan was 1.02 billion rials ($10,000) -- a 30-million-rial ($290) decline compared to a week earlier. The market price of Peugeot 207i also dropped a notch from 905 million rials ($8,870) last week to 880 million rials ($8,630).