Following the continues drop in the USD exchange rate over the past days, prices at automotive market have also started to drop.
Fluctuations at the foreign currency market have been very high over the pas few weeks. The Iranian national currency reached its ever lowest record against US dollar, while one USD reached 190,000 rials.
However, the trend reversed and Rial recovered part of its value back. As a result, the price of both domestic and imported automobiles also fell.
With the return of the US sanctions, the price of automobiles increased exponentially in Iran. Domestic manufacturers also contributed to this price hike by reducing their production. Furthermore, reports indicate that manufacturers also stored vehicles, refusing to sell them which also added to the instability of the market.
Thus, even though the currency market witnessed fluctuations over the past month, the automotive market maintained an upwards trend. However, Tuesday’s drop in currency rates led to a noticeable drop in the price of vehicles and especially imported vehicles.
The Head of the Tehran Automotive Showroom Union, Saeid Motameni, told Donya-e-Eqtesad that the price of domestic vehicles fell between 10 and 120 million rials. Meanwhile the price of imported vehicles saw a 400 to 500 million rials drop.
“Over the past few days, as supply was high while demand remained low, it was buyers who set prices and pushed prices down”, continued Mr Motameni. “This fall in prices is expected to continue, especially if domestic manufacturers increase production. When currency rates rise, a lower number of people seek to sell their vehicles. Naturally when the rates begin to fall, the number of sellers increases dramatically”.
He sees the increase of supply by domestic manufacturers as the only main way to reduce prices at the car market.
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