The Iranian car market, which has been considered as a capital good by many investors, is undergoing great changes in the current situation. In the current situation, no one, even within the government, can provide a definitive forecast of prices in this market. As much as there are price reduction factors, there are also price increase factors lined up, and there is no clear outlook for car prices next year. Join us in this memo to review the latest developments in the car market and the new car pricing formula. Stay tuned to Artan Press.
*** Worrying statistics of registration for the first day of one-year pre-sale of Iran Khodro
According to the latest data received from Siat Iran Khodro at 11 pm, the number of tracking codes issued to participate in the lottery is estimated at about 200,000 codes, which is a matter for consideration. According to this statistic, the number of registrants has decreased by ten percent compared to the previous one-year pre-sale plan of Iran Khodro. This shows the decline in investor and consumer confidence in automakers, which is a wake-up call for loss-making companies Irankhodro and Saipa.
The Competition Council came up with a completely wrong formula in an unprofessional and completely hasty plan. In this formula, the production growth rate is cited, while this is completely wrong. The plan also agreed to liberalize 45% of domestic car prices; The old formula of the Competition Council will be used to price 55% of the cars and the new formula will be used for the remaining 45%.
Unfortunately, the logic behind the new car pricing is very wrong. The formula is that the higher the production, the higher the price. The question arises in which part of this style sheet is the place of quality included? Prices will be based on the average market price to bring the factory price closer to the market price; The new price will be applied on the car from February.
*** Which cars will be priced according to the new decision of the Competition Council with the new formula?
Unfortunately, in this plan, only car manufacturers have been allowed to increase prices by increasing production, and no guarantee has been announced to eliminate intermediaries, and this has caused a lot of concerns. The car market in Iran has always been run by dealers due to supply shortages and high demand, and the price gap between the market and the factory price has been considered an accepted issue.
But the main question is which cars will be priced with the new formula due to the decision of the Competition Council? According to the information published from the minutes of the Competition Council, 18 cars will be included in the new pricing formula. These cars include Peugeot Pars, Peugeot 207 automatic, Peugeot 207 manual, Samand Soren Plus, Rana Plus, Rana Plus TU5, Dena Plus turbocharged, Dena Plus automatic turbocharged, Haima turbo manual, Haima turbo automatic, Tara, Saina S, Quick, Shahin, Aria, Berlians and Changan.
*** When will the new car pricing apply?
The important issue regarding the implementation of a serious car pricing procedure is that to date, all those who have registered in the lottery are subject to the old pricing formula and will be used after the new formula from January 1st. This is one of the reasons that has reduced the popularity of Irankhodro and Saipa lotteries. Unfortunately, with the increase in the delivery time of cars, the attractiveness of lottery schemes has drastically decreased. It is assumed that by eliminating the gap between the market price and the factory price, there is no reason to delay the purchase of the car for the next 9 months. It seems that car manufacturers are looking to buy time from these delivery dates.
But where is the big problem with this guideline from the Competition Council? Imagine that Iran Khodro has increased production but reduced the amount of car delivery to the customer, with this simple trick to increase both the market price and increase the production coefficient, and as a result, the final price will be a high price for Iran Khodro products. But in fact fewer cars have been injected into the market.
More interestingly, many experts have misunderstood the computational logic of the formula. On the other hand, it is not clear at all what principles the Competition Council has assumed, which has set a new price and a new formula for a car that has not been produced for two years. These cases caused the car market to go through inflammatory conditions yesterday, and we saw that some cars in the open market recorded a price increase of up to 10 million Tomans in less than a day.
*** The recent decision of the Competition Council disturbs the peace of the market
Observations of today’s car market show that the recent decision of the Competition Council increased the price of all types of cars by 5 to 10 million Tomans by disturbing the peace of the market. Prices in the car market had almost stabilized with a 30% drop in November, but since yesterday, dealers have stopped selling cars and prices in the market have risen.
Observations and monitoring of the car market in different cities of the country also show that today the price of Pride has increased by 3 million to 103 million, Peugeot 206 Type 5 with 10 million has increased to 275 million and the price of Samand has increased by 2 million to 178 million Tomans. .
Market participants believe that the increase in car prices today is due to the psychological atmosphere of the change in the prices of 18 cars since the beginning of February and will definitely subside in the next few days. But experience has shown that goods such as cars have high liquidity, and if car owners stop supplying, the market runs the risk of higher prices Will face what happened yesterday.
*** Possibility to eliminate the car lottery method
The secretary of the Parts Manufacturers Association said that the Competition Council has not yet announced the details of its decision, but eliminating inflation and focusing on the market and encouraging automakers to increase production have been two important events in the council’s decision. But the implications of implementing the new car pricing policy and formula need to be examined in more depth.
If this method is implemented with certainty, car pricing will fluctuate; Circulation goes up, the price goes up, but the same circulation goes up, it lowers the market margin, and because the price goes down, the formula calculates the price lower. Implementing the pricing formula in this way will calm the car market.
One of the issues raised in the new pricing formula method is that the condition for the price increase is a 50% increase in production, and new prices will be announced in February. Increasing circulation by 50% in the current situation carries a high risk for producers. The place of quality in these conditions and paying attention to the standards of the automotive industry is an issue that will be ignored in this multiplicity of circulations.
Recently, in some car news outlets, there has been talk of San Qawa entering the issue of car pricing, which we will provide in the next analysis if first-hand information on this issue is obtained.
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