Iran's automotive industry faces pricing issues - expert

Transport Materials 22 September 2021 10:23 (UTC +04:00)
Iran's automotive industry faces pricing issues - expert

TEHRAN, Iran, Sep. 22


The plan to organize the automotive industry in Iran has little effect on domestic auto production, an expert in the auto industry told Trend in an interview.

Amir Hossein Kakaei has indicated that the main part of the plan to organize the auto industry is a contradiction that shows the plan's studies have no positive effect on production.

He noted that the section about auto-import in the following plan states that individuals are able to import vehicles if they use the revenue from auto and auto part export for import so it would encourage automakers to export, however considering the $2 billion annual spendings on auto part import it would be difficult for domestic automakers to export on this level.

In the past three years, productions of between 100,000 to 200,000 vehicles were incomplete due to auto part shortage, and the plan to organize the automotive industry should solve the shortage of basic material not supply the auto luxury market.

"The auto-import ban during sanction was to create foreign currency balance, if the target is Iran's economic development the following plan is not good," he explained.

The auto pricing during sanction created obstacles for the growth of domestic automakers and led to a $26 billion loss and interrupted the auto market.

Iran automakers officially faced $6.6 billion losses in the last Iranian year (started March 20, 2020) while the price gap between factory and market was $47,000.

He noted that the plan does not solve the issue of the price difference between market and factory and automakers' losses so the parliament should respond to the issue.

While this gap has led to a massive influx of people and professional dealers to buy cars from the factory, it did not benefit the automotive industry and those active in this sector, as the automakers sold their products at prices set by the Competition Council.

The plan to organize the automotive industry seeks to balance supply and demand as well as turn the car into a consumer good.

To tackle the problem, the offering of cars in the commodity exchange has been a top issue under discussion in recent months.