Does Quota Sale System Prevent Tire Hoarding?

Khodrocar – Like other auto parts, currency fluctuations affected tire market and it is dealing with price increment of raw materials and import limitations. Tires will be sold via quota system in order to prevent hoarding but even this solution does not seem prevent the smuggling of bad-quality Chinese tires.

The price of foreign tires has increased by 80 percent however, according to the Central Bank of Iran, 29 companies received governmental currency for tires imports. So the reasons for this price increment is hoarding. In addition, the limitations for importers was effective.

The government also agreed to lower trade profits for passenger cars on Wednesday's meeting last week. But this sudden decisions are like painkillers and it is not clear when they will become ineffective.

What has been a matter of great concern these days is a reduction in imports and, in some aspects for some tire sizes, a ban. Last year, tire imports reached a good volume, was able to supply the market demands, and caused the reduction of tire smuggling. However, in this situation smuggling and low-quality Chinese tires threaten Iran’s market.

Seyed Mohammad Mir Abedini, Secretary of the Association of Tire Importers tells Khodrocar: "This shows the unawareness of authorities. They say that domestic productions are able to supply the demands of the market; it seems that they are very unaware of the future. The domestic production is not able to supply the demands. People like SUVs.”

"Also limitations exist in domestic car portfolios and their production volume has been reduced. If automakers continued to produce as before, we would have more problems. It is not clear what the government is doing in this regard, and from now on, it is predictable that we are  not going to see good things in the future. Definitely smuggling will damage the market,” He says.

 Khodrocar – In the automotive industry, all parts are chained to each other. Each part fails, causes a failure in the whole system. Today, we see that the supply chain of automakers is in trouble. Tire is like shoes and low quality leads to casualties and financial losses.


Khodrocar Translator: Maziyar Jafarieh