Importance of National Competition Council for Domestic Vehicle Market

Khodrocar – The Iran’s national competition council decides to increase or not to increase the prices of domestic vehicles according to three indices (Efficiency, financial inflation and quality) which receives from Central Bank of Iran. But this council is only allowed to price the domestic vehicles under 450 million IRRs.

This year, the prices of under 450 IRRs vehicles increased and this is while that the national competition council did not say anything about the price increments.

How is that the under 450 million prices of domestic vehicles increased while the council does not have any regulations about that? This is while, there are few vehicles in this segment and it seems that the interference of national competition council is not necessary.

Farbod Zaveh, an automotive industry expert tells Khodrocar regarding the issue: "Imperative pricing is not correct. The price is defined by demands and supply for a particular good.”

He criticizes the imperative pricing and says: If demands exist for a good like vehicle, the price increases and if the demands decrease the prices will decrease too.”
The automotive industry expert believes that imperative pricing destroys the private sector.

He adds: "In order to eliminate the monopoly in the car market, the problems of entering the investors and new factories in the market should be solved. Iran’s problems about investigation must be solved, so that the foreign companies will come and investigate in this market.”

Also Abolreza Mesri, supervisor of national competition council, answers to Khodrocar reporter about the beliefs of some expert about the uselessness of this organization in under 450 IRRs domestic markets and says: "Every organization has legal duties and the national competition council is doing exactly what the law says. If they are legislating and pricing, there are several reasons for this.”

He continues: "We gave many points to domestic vehicle producers and set 100 percent tariffs for the foreign good but in this situation consumer rights must be respected. Our ultimate responsibility is to respect consumer and producer rights. The presence of national competition council is necessary in this situation because there are no supervisory on vehicle pricing right now and this organization tries to respect the producer and the customer’s right.


Khodrocar Reporter: Sepide Ghazinezhad
Khodrocar Translator: Maziyar Jafarieh