A collective letter from Iran’s automotive industry experts about the “Car Market Regulation Package”

According to the report of Economy Online; In the text of this letter, it is stated: After more than a few decades have passed since the start of the automobile industry in Iran, structural and multifaceted challenges and issues are making the voice of the crisis in this industry louder than ever. In such a way, these issues have caused that the ecosystem of the automobile industry in Iran is not ready for the production of high-quality and high-tech cars, and in addition to the backwardness of the automobile industry from its other competitors in the international arena, it has also caused a lot of dissatisfaction in the country. Among the most important major problems of the automobile industry over the past few decades, the type of relationship between the government and automobile companies and the corporate governance of these enterprises, incomplete understanding of the industrial policies of the automobile sector, mistakes in the operationalization of these policies, and the distributed and contiguous decision-making structure with the presence of more than 20 It has been an official institution.

In addition, severe price fluctuations in the market, severe consumer dissatisfaction, accumulated losses of about 150 thousand billion tomans, flood of false demand due to the price difference of several hundred million between the market and factory prices, which has caused real consumers to have no access to factory cars, the situation This has made the industry more critical. With the knowledge that instability in macroeconomic indicators, successive currency shocks and inflation jumps in the country is one of the main factors of the market distress and has turned the car into a capital good, despite all these continuous mistakes in the field of decisions in this field, including errors in the pricing method. Delay in decisions and lack of coordination among the institutions involved in the automotive sector, in addition to aggravating the mentioned crises, make it necessary to take decisions as soon as possible to improve this situation. In addition to these challenges, the high social penetration of the car among people has also caused the smallest change to affect the society and quickly become a political challenge. For this purpose and keeping in mind that the urgency of the actions excludes the possibility of changing the laws due to its time-consuming nature in the current situation, the following solutions are proposed as 4 urgent solutions for market regulation within the framework of the current laws.

1- Protection of consumer rights

• Defining a parameter under the title of “quality criteria” in order to protect consumer rights and encourage car manufacturers to improve quality through detailed measures including safety level, fuel consumption, defects of cars produced during the first three months of production and consumer satisfaction by the Ministry Silence and determining the amount of profit (loss) of the car manufacturer in the annual price analysis based on the level of fulfillment of the quality criteria

• Increasing the penalty for delay in car delivery by at least 2% for each month of delay in car delivery

2- Fairness and predictability of the car pricing mechanism

• Determining the annual price of each car based on the analysis of the total cost within a maximum period of one month after the publication of the annual financial statement of car manufacturers and taking into account “research and development costs”, “financial costs related to production activity” with the approval of the official auditor. Evaluation of the “quality standard” published by the ministry of privacy and inflation in the automotive sector until the publication of the financial statement by the competition council

• Definitive price update using the “Car Manufacturer Inflation” index at the beginning of each season

• Immediate consensus on an institution as the final authority for price announcement, taking legal considerations into account

• Creating a system of internal and external supply contracts of Iran Khodro and Saipa with the possibility of monitoring its line by the Ministry of Safety in order to create transparency and increase the efficiency of supply management in the automotive industry.

3- Settlement of the domestic car market

• The supply of at least 10% of the annual production of each car manufacturer in the commodity exchange or any price discovery system, with a certain and predictable schedule of at least three months in the form of immediate delivery (it should be noted that in order to control and cover short-term market fluctuations and use Active car market policies, the government should sell part of the car supply at prices close to the market and have tools to control the market.

• Paying a part of the price difference discovered in the sales system (commodity exchange) and the price approved to the car manufacturer, based on the fulfillment of the annual circulation plan and “competitiveness criteria” and allocating the rest to the modernization projects of the country’s public transport fleet, both inside and outside urban, in order to facilitate financial support for public transportation, according to paragraph 5 of article 58 of the law on the implementation of general policies of article 44 of the constitution

• Adjusting the allocation of cars to specific demographic groups to 20% by the end of 1402 with the approval of the Market Regulation Headquarters or the Supreme Economic Coordination Council of the Heads of Powers, in order to cover as many car applicants as possible.

• The release of all the documents in the mortgage of the cars in order to supply all the existing cars that have remained unused.

• Expediting the approval of the Capital Gains Tax Law in the Guardian Council in order to further control the government over the market and to help turn the car into a consumer product.

4- Adjusting the market price through the correct supply of imported cars

• The supply of imported cars in the commodity exchange or any similar price discovery method in order to prevent the creation of a false market of imported cars, to increase the effect of car imports on adjusting prices in the market and to eliminate unbalanced rent due to the supply by lottery method.

Allocation of the difference between the discovered price and the approved price of imported cars to the modernization projects of the country’s public transport fleet, both inside and outside the city, with the aim of developing public transport in accordance with paragraph 5, article 58 of the Law on the Implementation of General Policies, Article 44 of the Constitution

• Removing obstacles and speeding up car imports in order to control the market