Weird conditions to control the Iranian auto market

Prices at Iranian auto market have gone sky-high over the last few weeks and continue growing. To control this trend,  the National Competition Council, has claimed that buyers must be limited. It suggests that the cars can be sold only if the buyer meets the following three conditions:

1) Each national ID can purchase only one vehicle each year. 2) Buyers must be at least 18 years old. 3) Buyers cannot sell their vehicles for a year and sales are determined via lottery.

Although this proposal has not yet been approved by the government, but its suggestions has already raised several critiques.

The Competition Council believes the cause of uncontrolled price hikes in the automotive market to be dealers which purchase the automobiles rather than consumers. The Council hopes that these steps will limit the activity of dealers.

Meanwhile, automakers believe that the performance of the Competition Council over the last few years has been one of the main reasons for the disturbance in the pricing of automobiles and instability at Iranian auto market.

Industry activists believe that these bylaws are one of the main reasons for the rise in the price of automobiles. Taadol quotes the Secretary of the Association of Automobile Manufacturers, Ahmad Nematbakhsh: “The path that the Competition Council has taken has been ineffective and led to instability in the prices.”

According to this Association, in the Iranian year of 1395, automakers had 40% growth in production while in 1396, 15% growth was observed. In the first two months of this year, 31% growth in production was observed.

“The Competition Council has authorized 7.1% increase in prices this year while an increase of 2.5% was authorized for the last two years. This means a 12 to 13% increase over the last three years. Meanwhile. The basic material for automobile factories have grown in costs by at least 70 to 80%”, Mr Nematbakhsh has added.

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