Struggle between Iran's car makers and spare part manufacturers continues

Business Materials 2 May 2019 09:44 (UTC +04:00)

Tehran, Iran, May 2


Board member of Iran's Car parts manufacturers Association Mehdi Matlabzadeh has criticized the high price of cars in the country.

"As long as car makers sell their products at a high price and people are also lining up for purchasing them, the situation will not be better," he told Trend.

“The price of raw materials is not cheap and state-owned companies such as Mobarakeh Steel Company, National Iranian Copper Company and petrochemical companies give us the raw materials at high prices,” Matlabzadeh said.

He says that they sell raw materials at free market currency rate, not the official rate.

"The car parts manufacturers shouldn't be blamed for increase in the final price of the car,” he said. “The prices on car parts haven't risen since the beginning of this year (started on March 21), although wages have increased by 40 percent, according to the order of Ministry of Labor.”

“Some parts are not produced domestically, such as the Airbag or ABS Brake,” he added. “Due to the time-consuming process of currency allocation and the blocking of the transfer of money from Iran to the outside, importing these parts has became very difficult and the prices have risen. ,” Matlabzadeh said.

Following the re-imposition of US sanctions in November of last year, inflation in Iran started to push the prices up in Iran, including the prices on goods and cars.

For instance, the cheapest vehicle in the Iranian market, SAIPA’s Pride sedan, is now sold at 450 million rials, just over $10,000. The same model was offered for just 200 million rials one year ago. Despite the sharp increase in prices, demand for cars has also increased.