Nowhere in the world is a car bought or sold as a capital good. But in Iran, in the last few years, cars have become a capital good, and in practice, prices in the car market have been affected by this issue. In this note, we will review and evaluate the price of cars in the domestic market. Please be with Artan Press.

Fluctuations in car prices in the Iranian market include two general behaviors that can be examined. The first phase includes the rapid and irrational growth of prices, which was extremely fast and challenged the conditions for traders and market participants, and the second phase includes price correction, which has been going on for two weeks, and probably until The end of the year will continue.

*** Evaluate the overall picture of the automotive industry

The general situation of the car market in Iran after more than 4 decades of activity of car manufacturers is quite visible in the first days of the beginning of the work of this company. In a way, it can be said that the market has become monopolized for these two automakers, the result of which is that a quality car has not been offered to the market at a competitive and reasonable price, because this is the scourge of monopoly that affects the Iranian car market. has done; Unwarranted support for the industry led to unprofitable pricing, and an import ban kept innovations in the auto industry to a minimum.

*** High variety of prices in the car market

At present, the car has entered the market at 3 prices, which include the price offered by the Competition Council, the price paid by the company and the market price. On the other hand, due to high liquidity growth, large sums of money entered the car market at once. This issue needs special investigation. Inflation in the automotive sector is estimated at over 300%, and in practice, the continuation of this pricing method can take the final buyer of the car out of the value chain forever.

*** The growth of the dollar and the impact on the car market

Over the past nine months, the dollar price trend has almost doubled, affecting all domestic and foreign goods. With the continuation of this trend, the price of car equipment and accessories, on the one hand, and the rising cost of cars, on the other hand, caused the car pricing process to deviate from its normal path, and the market is practically witnessing a terrible thirst for price growth. .

***  Lack of spare parts increases car prices

With the decrease in the supply of car spare parts and the increase in the cost price of auto parts manufacturers due to sanctions and the lack of currency for the import of equipment, we saw a threefold increase in auto parts, which had a strong impact on car pricing.

*** Food lotteries failed

Examining the latest statistics, the number of tracking codes issued shows that to date, on the second day of registration of this car, only 80,000 new codes have been issued, which has experienced an 80% decrease compared to the number of codes yesterday.

According to some unofficial statistics that we have received, about 20% of the previous tracking codes have also withdrawn from the registration process, the most important reasons being:

Currency prices fall
Uncertain price
Lack of profit participation
Seasonal price increase law
Low difference with the current market price

*** Pre-sales entered a new phase

According to the rumors, due to the decline in car prices due to the fall of the dollar and the possibility of Biden winning the US presidential election, we see that commodity prices are falling sharply. Although the dollar exchange rate is controlled by its main players, the car market is likely to see a steady decline. Therefore, manufacturers have entered the car market with their best offers:

*** Pre-sale of Denaplus automatic turbocharger

In none of Iran Khodro’s previous lotteries was there any news of this car being offered. Irankhodro has started to reduce prices to a certain extent and has actually offered this car to make its pre-sales more attractive. Iran Khodro Industrial Group, in response to customers’ requests to purchase the Denaplus automatic turbocharged product, will implement the pre-sale program of this car for three days from Thursday. Final customers will be determined and announced by lottery up to three days after the registration deadline.

*** ۲۵% increase in the price of Iran Khodro products

On Monday last week, the Competition Council issued a permit for the third time for car manufacturers, which is about 25 percent, taking into account the inflation of the car sector, which is announced by the Central Bank every month.

With the start of this year, when the Competition Council entered into the regulation of car prices, the increase in the prices of car manufacturers’ products, which used to be done annually, has now become seasonal.

After passing two stages of increasing the factory car price from the beginning of the year until now and now we are witnessing the third stage of the upward trend of car manufacturers’ products, which includes a 25% increase in the car factory price. By increasing this price increase over a period of five months, it can be concluded that on average, Iran Khodro Automotive Company increased its price by 13.5% per month and Saipa increased its price by about 14% per month.

Ordering pricing is not the nature of automakers and they always complain about it, and this started when the Competition Council determined the pricing, and this obliged the automakers to raise their prices at the request of the Competition Council.

Following events such as the resumption of sanctions and the subsequent withdrawal of international partners and the subsequent increase in production costs for automakers, it has been concluded that automakers have expressed their opposition more openly.

Artan Press