What is Aliabadi’s action plan to organize the car market?

According to the reporter of Ekhtaz Online; Of course, the solution offered by this ministry to increase people’s purchasing power is the production of an economic car, according to the related report, a sample of it will be produced by the end of this year and will enter the market as a replacement for Pride. But in the end, the ministry in charge of the automobile industry does not have a clear vision of the automobile market and price, and it is supposed to do a series of tasks to clarify automobile transactions, and if it does, the import and production of automobiles will increase; But how effective these measures are and how they calm the market, is still in an aura of uncertainty.

The car market is still turbulent. With a small change, the prices will go down a little, and again, with a smaller change in some economic and political components, the prices will jump and return to their previous state, and even tend to record a new record.

At the same time, in parallel with these disturbances in the car market, Abbas Aliabadi, the Minister of Peace, has also come to work and has made comments in the field of the car market in the past few days. But the market is not paying attention to his words and because there is no clear and effective strategy in the field of car production and market to give this signal to the market that the production and import is supposed to be enough to remove the brokers from the market and sell the car from A capital good returns to its original position, i.e. a consumer good, it goes on its way and the chaos continues.

Now, in a new report published by the Ministry of Industry, Mines and Trade, in addition to presenting the pathology regarding the current state of the automobile industry, it has addressed some elements that have had an impact on the chaotic formation of the current automobile market and announces that if they are under were under control, the situation of the market would have been different, but in any case, it should be noted that if the elements that the Ministry of Industry refers to as disrupters of the market were under control, then there is a lot of need for thinking and editing. There were no production strategies and market guidance, and the conditions were definitely not what we are dealing with today.

In a report recently published by this ministry, it is stated that “if the currency war had not started in the second half of 1401 and the currency rate had not increased abnormally; If the decrease in production in the previous years was treated and economic cars were added to the product portfolio, if the barriers to car imports were removed, and if the tax on capital gains and the supply of cars in the stock market were implemented, we would not have seen the current situation.

Of course, this ministry admits that these ifs belong to the past and that something should be done to compensate for these “failures”, the most important axes of which are stated as follows: “With the increase in production and import (new and used), the supply should increase; “False demand should be reduced with tax tools (tax on capital gains) and market transparency should be increased by requiring the registration of car transactions in the comprehensive trading system.”

According to the report of the Ministry of Industry, Mining and Trade, the production plan for this year is more than 1,700,000 cars, and so far, 100,000 cars have been ordered for import. Also, the two-urgency bill for importing used cars and removing some obstacles for new cars has been approved by the government and will be on the agenda of the Islamic Council.

On the other hand, the tax on capital gains is on the agenda of the Islamic Council and its implementation infrastructure is in the final stages and will be implemented immediately after the promulgation of the law. In addition, the infrastructure of electronic car transactions and registration in the comprehensive trading system will be established and will be implemented in cooperation with Faraja.

But if all this does not lead to tangible results in the car market and more and more people have access to cars as a consumer product and the essential needs of households, it will only be a plan, idea and strategy that will not cure the pain of the car market like in the past years. .

According to the report of the Ministry of Industry, Mines and Trade, although the supply of cars increased to some extent in 1401, but due to the decrease in production and the stop of imports from 1397, the accumulated demand created from previous years has made the car market unbalanced. Investigations show that point-to-point car inflation has been decreasing since May 1401, but it has increased since December, and the important thing is that point-to-point car inflation has decreased since June compared to the point-to-point inflation of the whole country and with a greater slope. It has decreased compared to the inflation of the whole economy.

The important point in this is that the Ministry of Industry, as the guardian of production, itself acknowledges that people buy cars to preserve the value of their assets. In the report of this ministry, it is pointed out that since November 1401, the currency price has increased and this increase has caused new applicants to enter the car market, but not to use the car, but to maintain the value of the property.

This false demand has increased car inflation since December. In January, point-to-point car inflation increases more than the average of the country, because limited assets (such as gold, foreign currency, cars, land and buildings) have the possibility of maintaining the value of assets, and with the increase of inflation and exchange rate, their demand increases immediately.

In the report of the Ministry of Security, it is stated that the increase in the exchange rate has 6 types of effects on the markets; One of these effects is the increase in the price of imported raw materials and, as a result, the increase in the price of the product (type one effect), but the increase in the market price in December is not due to the increase in the finished price of the car and the factory price has not changed, but due to the effort to maintain the asset value. (Effect of the fourth type). With the increase in the price of currency and inflation, some people buy assets such as cars to maintain the value of their assets, and thus, since December 1401, in addition to the accumulated demand from previous years, false demands have also been added, increasing car inflation.

According to this report, with the increase and decrease of the currency price, the price of the car increases and decreases, which is the effect of maintaining the property value; This is despite the fact that in markets where supply and demand are not proportional, 4 methods of “lottery, rationing, queuing and selling on the sidelines” of the market can be used for product allocation.

The lottery method has been used in the car market since the past years, it has several disadvantages and should have been removed, of course, in the first half of 1401, the lottery was removed for Saipa products, but with the increase in currency prices in the second half of the year, false demand entered the market. And the draw continued. Quotation has also been used in some way in the car market (such as the impossibility of receiving a car by applicants who have received a car in the last 48 months).

Sales on the side of the market have been implemented by car manufacturers in previous years, and in 1401 it was done using the infrastructure of the commodity exchange; But the use of this important tool was stopped despite the opinion of the Ministry of Mining Industry and Trade as the guardian of the automobile industry and the Ministry of Economic Affairs and Finance as the guardian of the macro economy. Finally, the turn-taking method with limited quotas was used from the end of 1401.

Car supply in the commodity exchange was one of the axes of the car industry program, which, if continued, could be the official price reference for car transactions in addition to reducing the free market price. To manage the free market, we must have tools to prevent false pricing, media creation, and self-interested resistance of dealers, and the supply of cars on the commodity exchange is one of these tools.

During the short period of car supply in the commodity exchange, the prices had a downward trend and were lower than the free market price, and if it continued, it would create a clear and accurate price reference, especially for used cars; But unfortunately, the supply of cars in the commodity exchange was stopped. It is worth mentioning that in 1401, more than 80% of car transactions were related to second-hand cars, and second-hand cars are priced based on the market price (and not the factory price).

Supervising thousands of car trading companies and tens of thousands of brokers who are not transparent and whose interests are not in line with the interests of consumers is a very complicated task; While in the commodity exchange, there are many tools such as determining the minimum supply in each round of trading, which can be used to balance supply and demand conditions and make prices realistic.

Allocation of cars by queue method started at the end of March 1401 and more than 900 thousand people registered in the first period. Considering that the production of passenger cars will be more than 1,600,000 units, including pre-sold cars in 1401 for 1402, all registered applicants can receive cars in 1402 and the capacities of 1401 will still remain empty and on 16 May The new registration for car allocation started with the turn-taking method at the end of March 1401, and more than 900 thousand people registered in the first period.

Considering that the production of passenger cars will be more than one million and 600 thousand units, including the pre-sold cars in 1401 for 1402, all registered applicants can receive cars in 1402.

In the registration of March 1401 for 5 types of cars (out of 46 types), the demand was more than the production capacity of one year; These applicants can choose other cars whose capacity is empty; Of course, a mistake was made in the announcement of the results by Iran Khodro Company, and the delivery date for these applicants was determined in 1403; While it should have been said that these applicants should choose another car to receive a car this year.

The Ministry of Industry, Mining and Trade has expressed hope that with the increase in production and import of some cars, the market will be balanced by the summer and other cars by the end of the year, and the delivery of new cars will return to normal.

According to this ministry, the country’s automobile industry has many problems and to solve these problems, a four-year program has been designed and is being implemented; So far, a year and a half has passed since the implementation of the automotive industry program. In the first step of the road map for the reform of the automobile industry, the focus was on neutralizing the sanctions, increasing and sustaining production, which has been achieved to an acceptable extent with God’s grace. In the second step, which started at the beginning of this year, the focus is on quality and productivity; Improving quality by focusing on safety, producing new products and customer satisfaction, and increasing productivity by focusing on reducing the cost of the car; Although the issue of “car price” has become more severe now;

The production plan for this year is more than 1,700,000 cars, and so far, 100,000 cars have been ordered for import. Also, the two-urgency bill for importing used cars and removing some obstacles for new cars has been approved by the government and will be on the agenda of the Islamic Council. Capital gains tax is on the agenda of the Islamic Council and its implementation infrastructure is in the final stages and will be implemented immediately after the law is promulgated. The infrastructure of electronic car transactions and registration in the comprehensive trading system will be created and implemented in cooperation with Faraja.

The supply and demand gap is not the only problem of the country’s car market, another problem is the disproportion of the price of manufactured cars with the purchasing power of the people. Economic growth in the 1990s was about 1%, and high inflation in this decade, especially the continuation of high inflation since 2017, has severely reduced people’s purchasing power; To the extent that the factory prices of cars are also high for many people.

According to this ministry, in order to increase the purchasing power, production should have a high and continuous growth, and inflation should be curbed, and an economic car should be added to the car manufacturers’ product portfolio. One of the weaknesses of the automobile industry is the lack of economic cars in the product portfolio. Since the Pride car was phased out, no replacement car has been produced. This several-year defect in the product portfolio of domestic car manufacturers has been fixed this year, and an economical car will be produced and launched on the market at the end of the year.

Now, although many works have been done in this ministry according to the Ministry of Industry, Mines and Trade, but the result that is seen by the people is a chaotic market where not only the prices are high but also the purchasing power of the people is greatly reduced in this market. It is weak and at the same time, the car and its market is managed by dealers, not the Ministry of Privacy.

Therefore, it is better for the Minister of Silence to present his comprehensive and operational plan far from formalities for the car market in a time frame, and the serious determination of the car manufacturers is to be able to manage the market and not by means of the tools at their disposal. are disrupting the market.