Title: Currency Fluctuations and Speculation Drive Uncertainty in Iran’s Auto Market
Tehran – Recent volatility in Iran’s auto market, closely tied to currency exchange rates, has sparked discussions among economic experts about the sector’s stability and the broader economic outlook.
A Market in Flux
According to Firouz Naderi, a market analyst, the price of cars had been on a declining trend in recent days, showing signs of a gradual return to previous levels. However, this decrease abruptly halted, with prices even increasing by one to two million tomans. This reversal caused the auto market to effectively resist further decline.
Naderi pointed to the parallel movement of foreign exchange rates as a primary driver. “The exchange rate, which initially showed signs of decreasing, also stabilized,” he stated. “This has caused the auto market to directly follow the dollar.”
Concerns Over Dollar Dependency
Naderi described the auto market’s complete dependency on the dollar as “a very concerning issue.” He warned that any increase in the foreign exchange rate would naturally lead to a corresponding rise in car prices.
Highlighting the government’s role, the analyst noted, “The government is currently engaged in negotiations, and there remains a window of hope that it can prevent a crisis.” He added, however, that a failure in these efforts could lead to significant challenges for the market.
Speculative Pressures and Global Context
Despite sufficient supply of vehicles in the market, Naderi identified speculative activities as a key disruptive factor. “Some dealers exploit the current situation,” he explained. “As soon as news items are circulated, even without a logical reason, they artificially inflate prices.”
He illustrated this by noting that a car worth 200 million tomans can suddenly be priced at 270 or even 300 million tomans. This environment, in turn, prompts buyers to rush into the market to avoid missing out on potential price hikes, thereby cementing these artificial price levels.
Naderi also contextualized the situation within the global auto industry, noting that it currently faces an oversupply, with major manufacturers worldwide, including German companies, having to downsize due to reduced demand.
Outlook Hinges on Currency Stability
Looking ahead, Naderi’s forecast for the coming week is directly tied to currency stability. “If the dollar exchange rate remains fixed, a price increase for cars is unlikely, and there is even a possibility of a decrease because supply has surpassed demand,” he affirmed.
He concluded with a clear projection: “If the exchange rate remains within the current range, the auto market will face a price reduction. However, if the dollar crosses the threshold of 120,000 tomans, cars will certainly experience a price increase.”