Investigating the consequences of the government's successive interventions in the automobile industry/ private companies in the risk of reducing production and increasing losses

Khodrocar - In the Sunday evening meeting of the government board, President Seyed Ebrahim Raisi said that the Competition Council has increased the price of assembled cars with what justification? The first vice president assigned the president and the ministers of economy and industry to investigate and correct this process. 

He said: In the year of "production growth and inflation control", it is not acceptable for a sector to increase the price of goods without obtaining the necessary permits, and the institutions should consider themselves obliged to deal with the high price and inflation.

This sudden decision comes at a time when since the beginning of this year and with the start of annual inflation at the same time as currency fluctuations, production costs have increased significantly and this definitely justifies any price increase in this area.

In a situation where the raw materials of the automobile industry, such as steel, copper, aluminum, polymer and even plastic materials, have faced multiple price increases since the beginning of this year, and on the other hand, no preferential currency is allocated to the automobile industry, the price cannot be increased. He considered it unjustified in this industry and expected price stability in this sector.

It has been emphasized that it is not acceptable to increase the price of goods by a sector without obtaining the necessary permits, and that the producers of raw materials in the automobile industry have increased the prices of raw materials without the intervention of any institution and relying on global prices, which has had its effect. It shows in the final product which is the same car.

  Since the beginning of this year, the Competition Council had started pricing assemblies without considering the increase in costs and even multiplying the price of the dollar, which led to the dissatisfaction of private sector producers. However, while complying with this decision, this group of producers put consultations on the agenda to improve this situation and hoped to bring the set prices closer to reasonable prices by providing financial documents. At the same time, warnings were given to stop or reduce production if the current situation continues.

Now, it seems that with this order of the president, we have to wait for production to stop or decrease, and if this happens, this year's production targeting in the private sector will be uncertain.

Definitely, keeping the prices constant in one sector with the aim of preventing the increase in inflation will not only cure the pain of the country's sick economy, but will also lead to the aggravation of stagnation in that sector and will stop production.

While the President says that the increase in the price of assembled cars is unjustified, only one factor of doubling the price of the dollar can be considered the biggest justification for the increase in production costs in the automotive sector.

It seems that it is necessary to provide the necessary platforms for the continuation of production instead of emotional and overnight decisions relying on calculations and economic logic to prevent stagnation and stagnation in this sector and to provide a basis for curbing inflation with the growth of production.