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Saipa managing director: Car prices to fall by 20 per cent on Iran's markets

Business Materials 25 February 2013 15:26 (UTC +04:00)

Azerbaijan, Baku, Feb.25/ Trend F.Milad

By increasing the production, car prices would fall by 20 per cent in Iran's markets, the managing director of Saipa Company said on Monday.

Iranian giant car makers increased their prices up to 80 per cent in the past two months due to the high costs of production.

President Mahmoud Ahmadinejad criticised the high prices of cars in the Iranian market during his televised interview on Saturday.

Following his comments, the Industry, Mine and Trade minister Mehdi Ghazanfari said he has ordered the giant car manufacturers to lower the prices.

Iran Khodro has also announced that the company is considering possible ways to decrease the prices.

Iranian carmakers plan to boost their production in the last Iranian calendar month which ends March 20, Kioumars Foroutani, an official with the Industry, Mine, and Trade Ministry said last week.

It is estimated that the country's total car output has increased in the 11th Iranian calendar month of Bahman (January 20 - February 18) compared to its preceding month, the ISNA News Agency quoted Foroutani as saying.

Allocating 20 trillion rials (some $1.631 billion based on the official rate of the USD) worth of loans to Iranian carmakers is being studied, he added.

Iranian car manufacturers produced 77,420 vehicles in the tenth Iranian month of Dey, which ended January 19.

The amount shows a six per cent increase compared to its preceding month's figure of 72,785, the Mehr News Agency reported.

On Nov. 27, 2012, the ISNA news agency reported that several car companies in Iran have halted their production, while according to an ISNA report, auto production has dropped by 66 per cent in September compared to last year's figures.

Iranian car manufacturers produced 1.648 million cars in 2011.

It was also announced last month that Iran will close the production line of six cars made by foreign brands.

Nissan's Maxima and Qashqai, Hyundai's Avante and Verna, Kia's Rio and Chinese Lifan 520 are those involved, the ISNA News Agency reported.

Hyundai has stopped providing parts to Iran, while Kia disagreed to install the air bag system on the Rio.

Nissan also won't renew its contract for manufacturing Maxima in Iran. Qashqai's production line will also be closed due to financial problems.

Iran's vehicle manufacturers are faced with both rising production costs and lacking some details as to how to manufacture cars after the giant international auto companies left Iran because of sanctions aimed to curb the country's disputed nuclear programme.

These include Italian Fiat, German General Motors and its French partner PSA Peugeot Citroen, South Korean Hyundai and the Japanese Toyota Motor Corporation.

Iran s major car producer Iran Khodro which had been a partner of France's Peugeot since 1989 had to close some production units.

Meanwhile, deputy manager of the Iranian Khodro Company, Hossein Najjarpour, said last month that IKCO has become self-sufficient in manufacturing the Peugeot 206. Following the US-generated sanctions, Iran Khodro had some problems providing Peugeot 206 parts.

IKCO has restarted manufacturing Peugeot 206 from the beginning of the current Iranian calendar month (December 21, 2012).

The company plans to increase the line's production capacity up to 300 vehicles per day by the end of current Iranian year (March 20), Najjarpour said.

Saying that IKCO currently produces 2000 vehicles per day, he went on to note that the number would be increased to 2500 by the end of current Iranian year.

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