The Best Ways of Pricing Cars in the Market

Khodrocar - It has been many years since the presence of the Competition Council in the field of car pricing, and the review of this period shows that this presence has not achieved anything but losses for both the producer and the consumer.

The loss of about 165 thousand billion tomans of car manufacturers until the first half of this year, along with the demands of thousands of billions to parts manufacturers and the banking network, is proof of this. This is even though during this time, the consumers have always seen the high difference between the factory price and the market price due to the mandated pricing. 

According to the automakers, the profit from this price difference has reached more than 10 thousand billion tomans during this period, which would have gone to the manufacturers in the absence of mandatory pricing. Therefore, due to such unpleasant experiences, the removal of mandatory pricing became the main demand of car manufacturers.

The experience of the car pricing process in the past years shows that the entry of any other organization such as the support organization has similar effects and cannot help the car industry much because this organization also had similar conditions to the past and according to the documents and The finished price will determine the price of the car, therefore, in the circumstances that it is stipulated that in case of violation, the competition council will enter and monitor this area, so this pricing method cannot be considered very effective and successful.

According to the statistics published by Iran Quality and Standard Inspection Company, during the last half-decade, the price index has had the lowest level of satisfaction among customers.

The question that always comes to mind is, how do global brands determine car prices? Surveys show that brands determine the price of their products based on market-based pricing strategy, brand value, and finally penetration pricing. In the first strategy, car price is determined based on market conditions and competitors' prices. Although the market plays an important role in this strategy, foreign car manufacturers are trying to bring their products to the market under competitive conditions by reducing the cost price. In the meantime, the amount of production affects the price of the car in the sense that as the circulation of car production increases, the price also decreases and vice versa.

In the second strategy, the price of the car is determined based on the real and perceived value, and in the final strategy, some car manufacturers consider a low price for their new car to achieve market share artificially to penetrate the market. The goal of this method is to achieve a high market share. , it is acceptable or standardization of the market, the example of which can be attributed to Chinese cars.

This trend shows that all over the world, car prices are determined by relying on the market mechanism, or in other words, supply and demand.

A similar experience was implemented in Iran in the 80s. At that time, the car manufacturers were inspired by the market price and a percentage lower than that, and since the middlemen did not get any profit from this way, they left the car market little by little, this caused the price difference. reached the lowest possible level to the point where in a period of time the market price was lower than the factory and the car became its true identity which is a consumer product.

This experience showed that leaving the command pricing and managing the market based on supply and demand would be the best way to manage the car market. Now, in such a situation that the support organization is looking for the definition of a new pricing model, it is necessary to pay attention to the fact that command management has not only never been an answer in the economy, but has always led us away from the main goal.