Unlike what people think, vehicle pricing by the government prevents the improvement of car qualities and the competitiveness of the automotive industry.
Khodrocar - One of the prevailing debates between automotive experts and economists in the country is always on the pricing of cars priced under 500 million IRRs by the government. The people believes that the interference of government in pricing these vehicles is for stability of cars prices, but many experts believes that it has many negative points.
Now the question is that what are the consequences of pricing the vehicles under 500 million IRRs by the government?
One of the major reasons, which made the government to interfere pricing of the vehicles under 500 million IRRs, is exchange rate fluctuations. However, the government have chosen the wrong way and it is only making the situation worse.
The final price of vehicles depends on different things like raw materials, salaries, tax and cooperation benefits. Takin other measures to reduce prices and keep prices constant, considering the parameters above can be in the favor of producers, consumers and the government.
Farbod Zaveh told Khodrocar regarding the issue: "Imperative pricing by National Competition Council of Iran is like an obstacle and doesn’t allow the automotive industry’s market to be competitive. National Competitive Council is the last phase to manage the competitiveness of the market. However, what we see is that this authority is unable to do its job and control the non-competitive market.”
He announces his opposition with the imperative pricing and continues: "The government interference in vehicle pricing has no positive points and provides a good situation for brokers in the market and these intermediaries make the most profit, not the producers. The best way to control the prices and to have a competitive market is the assignment of vehicle pricing to the automakers and adding creating more carmakers that are domestic.”
In addition, Amirhosein Kakaei, automotive industry expert told Khodrocar about the imperative pricing: "Imperative pricing of the government prevents vehicles’ price increment but on the other hand, exchange rate fluctuations cause lots of financial losses for carmakers and part manufacturers. In this way, automakers do not achieve their optimal goals at any time, and this can reduce the quality of the components and cars.”
Khodrocar Reporter: Fazel Suri
Khodrocar Translator: Maziyar Jafarieh
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