What is the message of carmakers’ losses to the stock market?

According to Tejarat News, the publication of the financial statements of the two industrial giants of the country and the losses of the car manufacturers caused a lot of ambiguity for the shareholders of the stock exchange.

Recently, Iran Khodro and Saipa published their unaudited financial statements up to 1400. The loss of both domestic car giants is a point that at first glance attracts the attention of any analyst. A loss that, given the monopoly of the car market, is unbelievable to few.

But the reality is that carmakers are losing money, and this has also worried shareholders. It should be noted that the future of investment in the automotive industry has become more ambiguous than ever due to the situation of these two large companies. Of course, there are other factors that are addressed in this report.

What was the loss of carmakers in 1400?

According to the information published in the Cadal system, Iran Khodro has recorded a loss equivalent to eight thousand and 486 billion Tomans in 1400. Saipa, the second largest automaker in Iran, has also made a loss of 4,246 billion tomans.

Of course, it should be noted that both collections in 1399 had also recorded heavy losses. But by comparing the financial statements of 1400 with 1399, it can be seen that the losses of Iran, Khodro and Saipa have decreased and increased, respectively. The loss of Iran-Khodro in 1400 has decreased by more than 35%, but Saipa’s loss in a contemplative process compared to 1399 has increased by 44%.

Experts believe that the reduction of Iran-Khodro’s losses compared to 1999 has nothing to do with the better performance of this complex. Because the production of this automaker in 1400 had a significant decrease compared to the previous year, which naturally reduced the losses of Iran-Khodro.

But the strange and thought-provoking point about Saipa is the sharp increase in the loss of this complex despite the decrease in production compared to 1399. In other words, despite the reduction of more than 12,000 units in the production process in 1400, Saipa sees more than 44% more losses in its record.

What is the reason for the loss of Iran, Khodro and Saipa?

But the question that has occupied the minds of shareholders and public opinion is what is the real reason for the loss of these two giants of the country’s industry? However, due to the monopoly of the car market and the application of heavy import tariffs and the astronomical increase in car prices in recent years, another expectation is expected from the performance of these two groups.

Looking at the performance of both major automakers in the country, we will notice a crisis in each period of the dollar jump. The reason for these crises is the government’s pressure on automakers to supply products at regulated prices. Because in periods of rising currency prices, general prices increase and naturally the cost of production increases. But automakers are forced to sell products at prices before currency jumps. This point makes the result of the performance of these sets significantly inclined towards loss.

Of course, in the meantime, we should not neglect non-optimal management as well as corruption in various fields, which has always increased the cost of production. The presence and strong involvement of the government in the automotive industry is also one of the determining risks for analyzing the situation in this area. Interference that has led to a deep gap between the price of factory products and the free market rate and has sweetened the palate of car dealers.

The prospect of cars on the stock market

Recently, Hossein Ghorbanzadeh, the head of the Privatization Organization, wrote a letter to the Minister of Silence, emphasizing the value and gold of the automakers’ shares. The letter coincided with the announcement of the receipt of Fatemi Amin’s impeachment and caused a noticeable jump in the stock market.

Shares of Iran, Khodro and Saipa also had a relatively good position during the first day of summer 1401, despite the negative overall market. Due to the rumors that are being heard about the imminent impeachment of the Minister of Silence, hopes have been strengthened in the hearts of car shareholders to remove the mandatory pricing in the field of cars.
The shareholders hope that with the change of the management staff of the Ministry of Silence, the discussion of orderly pricing will be included only in the high-volume products of the automakers. The supply of cars in the commodity exchange is another demand of investors in this industry, which has caused margins in recent weeks.

Of course, the people of the capital market and the car shareholders also have a glimpse of the issue of the nuclear negotiations and the process of reviving Borjam. Because in this case, the cost of production in the automotive industry will be reduced and, naturally, the possibility of stopping the loss-making process of automakers will also increase. However, given the situation on the way to the nuclear talks, the likelihood of reviving the IAEA has diminished.

In the event of a deadlock in the negotiations, this course of hope will be closed to investors in the automotive industry. However, it can be said that the shareholders are currently looking at the Baharestan tribunes to see whether Seyyed Reza Fatemi Amin will leave the Ministry of Silence or not.