TEHRAN, Iran, Nov.27
Trend:
Auto prices could be reduced if automakers set lower prices and pay their debt to auto part manufacturers, said a board member of the Iranian Auto Parts Manufacturers Association.
"In order to create a real auto price, automakers should be capable of paying their debt to auto part manufacturers and increase auto production. The auto pricing set by the government order for domestic vehicles should be annulled to solve the issue," Mohammad Reza Najafi-Manesh told Trend in an interview.
He went on to say that in terms of the auto market there are two separate markets. One where automakers set auto prices which is still very low and causes losses for auto manufacturers and the other is the free market which is a bubble with rising prices.
"The price gap set by the auto factory and the free market is between 500 million rials (about $11,900) to 2 billion rials (about $47,619)," he added.
"It has been suggested that to prevent automakers losses, they should set the lower price themselves on their products or wait for the stock exchange to choose a price since the current prices in the market are not real and are influenced by USD rate," Najafi-Manesh pointed out also mentioning that to produce 1.4 million vehicles per year the Ministry of Industry, Mine and Trade has made plans that could affect auto price cut.
"It is necessary to start the increase of annual auto production program of 1.4 million vehicles, that first require automakers debt to auto part manufacturers be paid," he noted.
According to Najafi-Manesh, considering the price of imported basic material, the price of the auto part should be reduced and in next step essential foreign currency for importing basic material should be supplied by the Central Bank of Iran otherwise the government should allow importers to import auto parts and basic material with the free-market rate in order to provide basic material for auto production.
"The Central Bank of Iran is not cooperating with auto part makers and saying they should not use free-market foreign currency rate for import of basic material and considered foreign currency being smuggled meanwhile automakers say the source of free-market foreign currency is the Central Bank of Iran that have injected $40 billion from 2017 to 2019 to stabilized foreign currency rate," he said.
"The precise statistics of imported auto parts and basic material held at customs is not available but it has been estimated to be $1 billion," he added.