SAIPA’s Pride compact sedan is the cheapest car produced in the country in Iran, and therefore affordable for most middle-class Iranians. It entered the Iranian market in 1993 under license from the South Korean company Kia Motors. Affordability is not the only thing that SAIPA pride is known for. Described by drivers as “moving coffins“Prides are known for their poor quality standards and account for a significant number of traffic accidents in a country among the top in the world. list of road fatalities.
Amid recent inflation in Iran due to the devaluation of the national currency – a crisis in part blamed on the reimposition of US sanctions – vehicle prices have risen at an unprecedented rate. But the increase in the price of pride has especially raised eyebrows. Since early August, prices on the open market have skyrocketed 50%, reaching 430 million rials ($ 10,212). The official factory rate is still almost fixed, standing at 240 million rials ($ 5,700), but it is an impossible purchase as buyers have to seek the product from intermediaries and car dealers.
The rise in pride prices is attributed to various factors. According to Tasnim News Agency, in the midst of a turbulent market, it is the online car dealerships and not necessarily the automakers that are driving this sudden increase. “Those who want to sell their used cars set the bar very high. Then the owners of the new cars follow suit,” Tasnim reported. Add to this information that the government of President Hassan Rouhani is considering a mechanism to vehicles at “free” price, raising fears that uncontrolled rates are being made.
Another problem is hoarding by automakers and customers. For some, automakers share the blame by refueling their cars, looking the other way as the free market increases the value of their products. Rouhollah Talebi, professor of mechanical engineering at the Iranian University of Science and Industry, believes that the high prices of the Pride models are “due to the fact that the factory [SAIPA] is not satisfied with the profits that automakers in other countries normally make. “
The poor quality of the car, which is not worth the price, was reflected in a sarcastic headline from the pro-reform daily Seday-e-Eslahat: “A metal can sold for 400 million rials [$9,500]. “Nonetheless, the low quality has failed to deter some people from hoarding prides. There is always an option to store the value of one’s assets amid the free fall of the national currency.
Keyvan, a 40-year-old civil servant living in the western town of Kermanshah, told Al-Monitor that he bought five prides from the open market earlier in August and kept them in his yard, waiting for the price to rise so that he can “save” his savings. “I bought them for 270 million rials [$6,412] each, and now I can sell them for up to 430 million rials [$10,212],” he said.
The price increase for Prides is just one of many Iranian cars that have seen price increases. The question prompted lawmakers to investigate the inefficiencies in quality, pricing and aftermarket services of domestic automakers. It has also become a determining factor pushes for dismissal Industry Minister Mohammad Shariatmadari, who will likely soon find himself in the crosshairs of parliament – potentially becoming the third Rouhani cabinet member to sing swan song.