Recent market fluctuations in the dollar and gold sector in recent days have caused shocks that have reached the car market. On the other hand, there are contradictory news about the change in the country’s policies regarding the car market, which are reviewed. It will help to clarify the car market. Therefore, in this memo, we will pay attention to all the details of the car market. Stay with Artan Press until the end.
From the second half of 1998, the car market witnessed an upward movement and uninterrupted growth in the prices of domestic and imported cars. With the outbreak of the Corona virus and the temporary closure at the end of last year, car transactions were moved to cyberspace, and the pricing process practically shifted towards taste. Unfortunately, due to the lack of adequate monitoring of pricing channels on social networks, On the one hand, and rising public inflation expectations due to the spread of the Corona virus, prices in the unbridled car market began to rise.
*** The sharp rise in car prices and the dollar at the beginning of the year
Since the beginning of this year, with the irrational and emotional growth of the dollar price, we have witnessed a sharper growth in the price of domestic and foreign cars. This issue went so far that the price of Pride exceeded 140 million Tomans and the price of Peugeot 206 Type 5 exceeded 330 million Tomans. In the foreign car market, the atmosphere was much more inflamed than in the domestic car market. So much so that the BMW X4 series was priced at around 8 billion tomans, and to the disbelief of these prices, there were customers who wanted to buy these cars.
From May to November of this year, car prices began to increase with a smoother slope, which provided a very good opportunity for car price fluctuations. Trading became two categories of investment transactions and consumer transactions in the car market, and this The issue in the market caused the pricing methods to be blurred.
*** Blowing up car bubbles in the fall
In December of this year, however, the trend of car transactions took a completely different path than its one-year period. In the past year, there has been no good in reducing car prices, and like in other parallel markets, it was time to dump most of the car bubble. The issue of the US election and Trump’s acceptance of defeat stabilized the currency and gold markets and led them downhill. Prior to the presidential election, the foreign exchange and gold markets had targeted the 30,000-toman route for Trump’s victory, which paved the way for the 20,000-toman dollar.
Biden’s victory in the election, on the one hand, and the argument that the foreign exchange market, due to the positive outlook facing the new government and the Biden government, caused the rial to strengthen against the dollar and start a downward trend in the dollar price. The downward trend in the prices of automotive products has accelerated with the closure of some industries, including car shows, so that some market participants emphasize a 32% drop in prices.
From the beginning of December, along with the closure of many classes, trading in car shows also stopped. Although car sales continue on social networking sites and networks, according to some market participants, virtual transactions have also reached their lowest level due to numbering restrictions.
*** Car manufacturers are losing money
In the current situation, there are issues that will guide the car market in the future and provide a way to adjust prices. This year, for the second year in a row, domestic car companies were losing money in their financial statements, and this figure is estimated to be close to 80,000 billion tomans. Among the factors that cause losses to Iranian car companies can be the issue of car order pricing, heavy waste and low production technology and lack of use of lean manufacturing approaches in the Iranian car industry, which are issues of sanctions and high costs. Can be further due.
Due to the mandatory pricing of cars over the past year, automakers strongly protested the law and demanded an increase in car prices. Unfortunately, due to the capital nature of the car, the Iranian car market has seen strong demand growth, which has enabled automakers to meet There is no need for the market. For example, in an analysis by reputable databases, the annual demand for cars in Iran is estimated at about 2 million cars, of which Iranian car companies can only supply 900,000 cars a year.
*** Eliminate the mandatory pricing of the car market
According to the mentioned explanations, if the orderly pricing is removed from the car market, we will see a sharp increase in the factory price of domestic products. The impression may be created that when the factory price reaches the open market, the process of brokerage and fluctuation in the car market will end.
But this can greatly increase the price of cars in the market. Because the supply from car companies does not meet the needs of the market, and even if all the cars stored in warehouses are marketed, it provides only 40% of the annual needs of the markets. If this happens, it will be very difficult to imagine the difference between the market price and the factory price, and in practice, there will be severe rents for car owners.
*** Parliament enters the issue of car market
During this week, the parliament addressed the issue of the car market. Since the car market was witnessing a decline of about 30 percent, it was a good time for the legislature and the executive branch to control the price of the car and help adjust its rate. The parliament has launched a plan to organize the automobile industry with the focus on the supply of cars in the stock market, and its generalities have also been approved by the parliamentary industry commission The government has also started working on a plan in this regard.
The key words used in the speech of the speaker of the parliament are the formulation of a package of production leap and the exit of car companies from losses. These two issues can have very deep meanings for the car market in Iran for a period of two years. It is likely that the legislative path will lead to a way out of the loss-making crisis for car companies.
Despite the sanctions, we can not expect a leap in production and technology, so it is likely that the scenario of the abolition of automotive order pricing is a bolder scenario that should be controlled with a stimulus for the uncontrolled growth of prices.
One of the driving forces to prevent the uncontrolled growth of car prices after the cancellation of the mandatory pricing of cars is the scenario of the car entering the stock market, which can have consequences along with its benefits if this plan becomes law for all production cars. The interior includes a circulation of more than 5,000 units and imported cars that have imported more than 500 units in 12 months.
In a way, purchasing power is created for all people. But the important issue of car trading based on stocks is practically not an attractive issue for the real buyer, and it is considered as a kind of speculation and attracts intermediaries.
On the other hand, with the entry of the car into the stock market, the final price of the car is deposited in the supply and demand system, and this issue can cause dissatisfaction of the automaker in the long run. Because in the stock market, we saw a heavy outflow of salaries and a drop in the stock index of companies.
*** Consequences of entering the stock market
If the basis of car pricing is based on stock prices, in addition to the stability of prices as these days of the automotive industry is weak and unbalanced, but car manufacturers may not be able to withstand the negative days of the stock market and plunge the market into recession and supply decline. The restriction on buying and selling on the stock exchange is the requirement to buy once every three years, which is planned with the aim of eliminating intermediaries.
If a person sells a car before the end of three years, he has to pay 80% of the difference between the base price and the market sale price as tax to the government, and this is to eliminate brokerage. It seems that due to the different and deep dimensions of the car entering the stock market and the complex scenarios that prevail, this issue is not in the best interest of the end consumer and may cause excitement in prices.
The issue that the government has entered into is the scenario of lifting the ban on cars entering the country. In these circumstances, under special laws, natural and legal persons will be allowed to import cars in limited numbers and according to a special formula. This plan, the implementation of which is still in an aura of ambiguity, was initially associated with some ifs and buts.
*** Will car imports be released in the new year?
The arrival of a car with a predetermined mechanism can bring rents for some people and in a way damage domestic production and allocate some of the country’s dollar capital to this issue. In the budget proposed by the government, which was presented to the parliament today, two thousand billion tomans have been considered as car import duties, which considering that in last year’s budget this figure was only 100 thousand tomans, it can be said that whispers have been raised about car imports. It is being realized.
Despite the budget deficit and the government’s debt to the central bank, the decision to raise car imports was a strange issue that few economists consider necessary for the current situation in the country. Every year, the government sets public tariffs for imports of public vehicles, including ambulances, in the budget, but the figure for 1400 is significantly different from the figure included in the 1399 budget.
*** Car manufacturers’ scenario with car import liberalization
The government has been predicting car import duties in the 1400 budget, while in recent weeks, Baharestan residents had predicted a route for car imports in a plan to organize the supply and production of cars. Although the plan has not yet been approved in the open court of the parliament, the budgeted figure shows that things are happening in this area, which can perhaps be attributed to the liberalization of car imports.
If the car liberalization plan becomes operational, the loss-making process of Iranian car companies will pass more quickly. Certainly, with the import of foreign brands, the luck to domestic brands has decreased and the Iranian producer must reduce the cost for the attractiveness of his product. This scenario puts the government and the carmaker back to a situation where pricing was dictatorial and car companies had to comply with government-announced prices.
*** From the relationship between currency and car market
Over the past decade, car prices in the open market have been subject to currency prices. As a result, by reducing the exchange rate, we can see a decrease in car prices in the open market. But the foreign exchange market does not have a clear path nowadays. We sometimes see decreases and increases of 1000 Tomans in one day in the foreign exchange market, which has greatly confused the buyers and sellers of cars.
Since the price of foreign currency has decreased, the price of cars has also been decreasing, we are still witnessing a decrease in the price of foreign exchange in the market, and if this trend continues, the price of cars will definitely continue to decrease and we should not buy cars now. But with the growth of 800 Tomans in the price of the dollar in one day, we witnessed the growth of 30 million Tomans in the price of Peugeot 206 Type 5 in the open market on Wednesday, December 3rd. It should be noted that car price fluctuations are affected by exchange rate fluctuations with little inertia and inertia Thirty takes place. Because the liquidity of the car is a little time consuming and momentary fluctuations can not cause a shock to prices.
*** Existence of corruption in the car and steel market
The Minister of Industry, Mines and Trade recently said in a conversation about the latest situation in the automobile industry market that he does not deny the existence of corruption in the automobile and steel markets and we are looking for the main roots of rent in these two markets. He even suggested price transparency They allow new companies and factories to enter the market in order to balance the growth of the car market supply. He referred to the issue of rents in these markets and acknowledged that we seek to reduce bureaucracy, fight corruption, make transparency and strengthen production and eliminate brokers.
In the car market, we will most likely see changes in supply and demand, the quality of car supply and how to invest in this market. Despite the decrease in prices in the car market, it is likely that the price increase trend will resume in the coming days, and I will have to wait until we observe the preparations of Minister Samat in this regard, what will be the results.
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