TEHRAN, Iran — A majority of car consumers in Iran complain about the low quality and high prices of vehicles produced by local manufacturers, according to a poll conducted by news website Khabar Online. Citing another poll, leading economic newspaper Donya-e Eqtesad reported Aug. 11 that more than half of Iranian car consumers think that the vehicles' quality does not justify their prices.
The two leading Iranian automakers Iran Khodro Co. (IKCO) and SAIPA both saw a sharp decline in sales last year. The situation began to deteriorate after a nationwide campaign called on citizens to boycott new domestically produced cars in protest of their low quality. Eventually, the government offered a stimulus package providing loans for potential consumers of Iranian-made cars. The package boosted sales without manufacturers needing to cut prices.
IKCO and SAIPA recently displayed their new car models in an automotive exhibition in the city of Mashhad, unveiling prices that critics say are still high. IKCO, which signed a 400 million euro ($446.5 million) joint venture with Peugeot a few months after the nuclear deal's January 2016 implementation day, announced earlier this month that prices for Peugeot's 208, 2008, 301 and 508 models will range from 500 million rials ($16,000) to 1.8 billion rials ($57,900). Meanwhile, SAIPA revealed that prices for its Citroen models C4L, C3, C4 Aircross and C6 will start at 600 million rials ($19,300) and go up to 1.3 billion rials ($41,800).
Critics say the new cars are too expensive to be affordable to a majority of potential Iranian customers. “The price of a car may substantially increase for having what [automakers] call extra options,” mechanical engineer and businessman Mehdi Jabbari told Al-Monitor. Of note, at the expo in Mashhad, an IKCO official was quoted as saying that the Peugeot 301 model, for instance, could be sold between 470 million rials ($15,100) and 600 million rials ($19,300), depending on the installed options. Jabbari added, “It is an abuse of their monopoly. The options are in many cases essential parts of the car, like its airbags. The way they charge customers is not fair at all. They’ve been able to increase prices as they want, simply because they don’t have any real rival.”
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