Navigating Iran's Automotive Landscape: Promises, Pitfalls, and the Pursuit of Reforms

As the curtain falls on Ebrahim Raisi's administration, a bold announcement has emerged, promising to revolutionize the Iranian car market. The government has approved a plan to lift the ban on the import of used foreign cars, sparking initial excitement among the media and the public. However, as the details of the plan unfold, the enthusiasm quickly dissipates, revealing a complex web of restrictions and inconsistencies that ultimately leave the monopolistic market of state-owned car manufacturers intact.

Unveiling the Realities: Stringent Restrictions and Economic Challenges

Stringent Restrictions Undermine the Policy

The regulations accompanying the plan reveal a series of restrictions that cast doubt on the feasibility of the new policy. Among them are stipulations that the cars must be between 3 to 5 years old, have an engine capacity limited to 2500 cc, and must not be imported from the United States. Additionally, imported cars cannot be sold for five years, and the foreign currency used for the purchases must come from "profits from exports or foreign investment." These stringent requirements significantly limit the accessibility and practicality of the policy, raising questions about its true impact on the Iranian car market.

Economic Realities and 'Hypocrisy'

The current landscape of the Iranian car market is characterized by high prices and a lack of affordable options. The cheapest domestic car costs between ,500 to ,000, while the majority of imported cars are low-quality Chinese models priced as high as European or Japanese cars. For instance, a Cherry Tiggo 8 Pro Max SUV costs ,000, and other Chinese cars, like the Lamari EAMA produced by Dongfeng Liuzhou Motor and assembled in Iran, sell for ,000. Brands like Great Wall Motors, Baic, FAW, and JAC also import parts for assembly, with prices ranging from ,000 to ,000. This economic reality highlights the disconnect between the government's promises and the actual affordability of vehicles for the average Iranian citizen, leading some to perceive the new policy as "hypocritical."

Impractical Requirements for Foreign Currency

The requirement that the currency needed for purchasing the cars must originate from abroad and be approved by the Central Bank further limits those with access to benefit from the new policy. As Ahmad Aghaei, the Deputy Minister of Transportation, clarified, "The importer must have a foreign currency account or currency outside the country to buy the car. Those who have their currency within the country will face restrictions from the Central Bank for sending the currency out of the country." This restriction highlights the impracticality of the plan, as it effectively excludes the majority of Iranians from taking advantage of the new car import policy.

Public Outcry and Media Criticism

The public response to the new car import policy has been largely negative, with many Iranians dismissing it as deceptive. In conversations with Iran International, individuals like Mahmoud from Karaj expressed skepticism, stating, "It is a lie. If you want to import a car, you have to export goods. How many people have the ability to export in order to afford a car?" The Iranian news agency Tabnak also pointed out the "deceptive" nature of the plan, stating that the regulations only benefit a small group of exporters, reinforcing the monopolistic market of state-owned car manufacturers.

Financial Struggles of Domestic Manufacturers

The Iranian auto industry is facing significant financial challenges, with the country's two main government-controlled automakers, Iran Khodro and SAIPA, struggling to maintain profitability. In February, the Minister of Industry, Mine, and Trade, Abbas Aliabadi, called for more funds for these companies, which are incurring daily losses of .7 million, totaling over one billion dollars annually. This is a direct result of government interventions in the auto industry, and the quality of domestically produced cars is also a significant concern, with the majority of road deaths in Iran involving drivers of these low-quality vehicles.

The Car Mafia and Election Politics

The Iranian car market is further complicated by the presence of a "car mafia," as described by Ali Khosravani, the vice president of the Tehran Automobile Dealers Union. This shadowy group maintains a tight grip on the market, making it difficult for new entrants to gain a foothold. During the presidential election debates, president-elect Masoud Pezeshkian questioned why Iranians should be forced to drive substandard cars under the guise of supporting national production, while his rival, Saeed Jalili, made a controversial claim about the popularity of the Iranian-made Samand vehicle in Russia, which was widely ridiculed on social media.In the end, the new car import regulations in Iran, while initially promising, reveal a complex web of restrictions and inconsistencies that ultimately leave the monopolistic market of state-owned car manufacturers intact. The majority of Iranian citizens remain unable to benefit from the changes, highlighting the gap between government promises and the harsh economic realities on the ground. Observers believe that the promotion of "one car import for every single Iranian" is clearly a "populist" slogan, as few people have the financial means to import a car, leaving the public disillusioned once again.