The suspension of Iran Khodro’s trading symbol (a state-affiliated automobile manufacturer in Iran) on the stock exchange, coinciding with an average 50% increase in domestic car prices, has intensified disputes between automakers and the government over price controls and placed a stagnant market on the verge of a new wave of turbulence.
An examination of domestic vehicle price trends from March 2025 to February 2026 shows that the upward trajectory during this period resulted in an approximately 50% increase in the prices of a significant portion of locally produced cars—an increase that, amid market stagnation, has raised serious questions about its economic rationale and social consequences.
This trend ultimately led to an order by the Ministry of Industry, Mine, and Trade to halt the implementation of the latest announced prices for Iran Khodro products. Jamshid Imani, deputy CEO of Iran Khodro, warned during a news program on Saturday, January 31, 2026, that if the new prices are not approved, the company’s production will be stopped remarks that clearly indicate a deepening rift between policymakers and producers.
According to some experts, this very tension and policy uncertainty could once again lead to higher prices for domestically produced cars in the open market—a phenomenon that has previously occurred alongside spikes in the dollar exchange rate, pushing the prices of some mid-range Iran Khodro and SAIPA models above 10 billion rials (approximately $6,250).
iA 50% Rise in Domestic Car Prices in a Stagnant Market
This upward trend is not limited to Iran Khodro. SAIPA, another major state-affiliated automaker in Iran, has also raised the prices of its products several times over the past 11 months.
It appears that even an average 50% increase has failed to satisfy the executives of the country’s two largest automakers. Meanwhile, products of Modiran Khodro have also seen significant price hikes, influenced by the conditions facing Iran Khodro and SAIPA.
Compensating Accumulated Losses; Price Hikes or a Policy Deadlock?
Domestic automakers have consistently cited rising production costs—particularly higher prices for imported parts due to currency fluctuations—as the main reason for demanding price increases. Executives at these companies believe that price liberalization and the government’s withdrawal from price controls are the only way to rescue Iran Khodro and SAIPA from financial crisis and accumulated losses.
In contrast, experts stress that the core of the crisis lies not only in production costs but also in the market’s monopolistic structure and the persistence of accumulated losses. In their view, if the government were to decisively liberalize car imports even for a limited period, current price levels—given the quality and after-sales service of domestic products, which critics say fail to meet even minimal consumer satisfaction—would not be sustainable, and unreasonable increases under stagnant conditions would come to a halt.
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Rising prices in the currency and gold markets have also fueled the current stagnation in the auto market. A reduced investment-oriented view of cars compared to previous years, a growing consumer preference for used vehicles, and the خروج of part of the auto market’s liquidity toward currency and gold markets have all intensified automakers’ concerns about mounting losses.
However, repeating the policy of continually raising official prices—rather than attempting to attract customers through price adjustments and quality improvements—appears less a solution than an insistence on a failed model of loss management, one that could ultimately deepen stagnation and further erode public trust in the automotive industry.
Meanwhile, some analysts believe that the government’s decision to liberalize car imports, alongside the removal of preferential exchange rates, has placed automakers on a path toward even greater losses. From this perspective, insistence on engineering prices through repeated official hikes can be seen as a confrontational response to government policies—a response that has already contributed to heightened market volatility.
Price fluctuations amid a sharp decline in demand have further highlighted the role of broker networks and the alignment of parts of the informal market with automaker executives; this situation not only fails to contribute to market stability but also deepens the divide between producers, policymakers, and consumers.
