Iran’s automotive industry



Car prices in Iran have skyrocketed since April 2011. When prices passed the thirty percent increase mark; the government intervened but only managed to decrease the prices 10 to 15 percent. Second only to the oil and gas sector, auto-manufacturing is a major industrial sector in Iran which has placed the country among the top ten largest auto makers in Asia and is known to be the biggest in the Middle East. Soaring prices forced Iran’s major auto-makers, Iran Khodro and Saipa, to reduce production and sales.

Observers point to several factors as the reasons for the escalating prices including: the depreciation of the Iranian currency, government mismanagement, and the lack of price regulations that would allow comprehensive controls over the automobile market. The escalating prices also prompted the parliament to step in. Minister of Industry Mine and Trade, Mehdi Ghazanfari was summoned to respond to the MPs. Eventually, the Competition Committee was ordered to devise a formula to determine car-prices.

In this edition of the show we are taking a closer look at Iran’s automotive industry. We will investigate the reasons behind the recent price hike, and discuss the measures taken by the government to tackle the problem.

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