Car price evaluation from the beginning of the year shows that despite the cross-sectional price drops in May and June, but the decline in prices has been dominant in the market. The car market is fueled by a variety of issues. Rising exchange rates and declining production are two levers of pressure on this market. Maybe in the short term the good will be diminishing. But in the second half of the year, despite all the ups and downs, the car market will be up. In the following, we will analyze the current situation in the car market. Please be with Artan Press.
*** The price of some cars has increased by 30 million in the past month
Car price evaluation shows that in the past month we have witnessed an increase of 20 to 30 million Tomans in car prices in the market. Whenever the exchange rate rises in the open market, the price of the car also rises in the market. The notion that with falling currency prices, one can expect prices to fall in the car market. Due to the nature of price stickiness, which is rooted in the Iranian economy, it is wrong and we should not expect a sharp decline in car prices in the short term.
*** Poor technology and wasted capital driving car price growth
Iranian automakers are in obvious loss due to the use of poor production technologies and high losses. Unfortunately, the loss of this inefficient production must be borne by the purifier. Automotive companies are still helpless in providing a rational survey system of masters. Automakers have long been severely disadvantaged by the Competition Council’s pricing formula, and this new decision by the council not to calculate the inflation rate in advance will definitely add to the volume of losses for automakers. The continuation of this trend will definitely be offset by rising prices. But the question is how long can the market withstand this amount of irrational prices? However, whatever happens in the market tends to drive the car up.
*** Car price evaluation in accordance with the competition council directive
The Competition Council should have reviewed the car price based on the inflation rate every three months, but unfortunately this action was not taken by this council and it seems that this council does not give credit to its approvals. This can create a mess in the car market. Car price evaluations show that if this trend continues, the automaker will grow its products individually by the factories, and the market will experience an unprecedented unrest. The way out of this situation is to get the car market out of the double price situation. Of course, this is definitely time consuming. But in the end it must end.
*** Continuous fluctuations in the car market
Stopping the growth of prices in the market in the last few days has raised the question for buyers and sellers, can we be happy with its continuation? These days, the car market is floating on the political and economic issues of the country and is facing many ups and downs. Although the car market seems to have weathered the heat of the summer of 1400 these days, it is still a long way from the declining phase of late last year. The two items of exchange rate and supply are the most influential components of determining car prices in the coming days.
If the foreign exchange market stabilizes, it will send a positive signal to the car market and in a way bring the car market closer to stability. Of course, this stability is conditional. If the exchange rate is stable but carmakers are unable to adjust to their supply situation and widen their supply path, it is likely that car prices will pick up again.
*** Evaluate car prices from the perspective of car policy maker behavior
The automaker in the twelfth government, considering the 12 percent share of 1400 production for private automakers, referred to this sector as the third pole and monopoly in the country’s automobile industry. This is at a time when the private sector is not as happy as the real pulse of the car industry. The car price estimate indicates a 73% lag in production in this part of this year’s program. The previous government did not have the will to implement the plan to sell cars on the commodity exchange. While we believe this plan will have better regulation of supply and demand.
*** Release of inflation rate and the possibility of rising prices
We are waiting for the announcement of partial inflation by the Central Bank to announce the new rates. Most likely, the car pricing formula is a combination of inflation announced by the central bank and some other variables. It will be announced after the end of September. This gives the market a signal that car prices will rise again from September onwards. Of course, this was already clear. But the certainty of inflation in the car market has made everyone expect prices to rise.
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