Roughly nine out of ten scrappage centers have been forced to shutter their business and the remaining are grasping at straws as ill-conceived government policies in the auto sector start to show signs of stark failure.
Scrappage centers are shutting down one after another as domestic car makers are exempted from the scrappage scheme and auto imports are on the wane as a result of spiking tariff rates, reported Khodrokar.
Head of the Association for Scrappage and Recycling Centers, Mostafa Joudi says 90% of scrappage centers have been forced to shut down their business and the remaining are struggling to survive.
Introduction of scrappage programs is creme de la creme of government-funded strategies to promote the replacement of gas-guzzlers with modern vehicles. The plans aim to remove fuel-intensive high-emission cars from the roads.
Many countries have implemented such schemes to stimulate the auto industry and protect the environment, killing two birds with one stone.
Joudi underscored the role played by the administration of President Hassan Rouhani leading to the current stagnant state scrappage centers are stuck in.
Overnight Decisions
According to him with the administration’s overnight decisions, the government’s earlier acclaimed scrappage program has landed in the scrap yard itself.
He says, “Domestic carmakers were suddenly excluded from scrapping clunkers due to their lobbying powers but importers are still dealing with car disposals.” However, auto imports have dropped in recent months as well.
Joudi is referring to a string of government strategies starting from the summer of 2017 when Industries Minister Mohammad Shariatmadari put an end to a directive that would have had local automotive companies send one old car to the junkyard if they produced vehicles with fuel consumptions over 8.5 liters per 100 kilometers.
Another measure taken by the administration was to shut down Iran’s auto import permit registration website in June 2017 pending new rules.
The amendment to the rules was finally issued in the final days of the year, sharply pushing up tariff rates in an attempt to support domestic vehicles.
The controversial directive drew much criticism from environmentalists and the public, resulting in a volatile situation that is still unresolved and deters importers from bringing vehicles into the country.
Car imports experienced a 9% YoY slide in the year which ended in March, according to data released by the Islamic Republic of Iran Customs Administration.
Scrappage centers are now a loss-making business, granting more ammunition to polluting factors that have reached unprecedented levels in Tehran and almost all major Iranian cities.
Final Nail
Joudi also pointed to the car scrappage scheme in free trade zones and said, “A piece of legislation was signed into law in regard with disposing of beat-up cars in free trade zones, a scheme which was not implemented and has been gathering dust.”
Head of the association is not 100% right. The scheme is not forgotten, it was rather revoked on Saturday by the Cabinet.
Since importers bringing vehicles into the country’s free trade zones were obliged to consign bangers to wrecking yards according to their fuel consumption level, they simply refused to get a customs clearance for the cars.
After four months of 4,000 imported vehicles being stuck in customs of Arvand Free Trade Zone, southwest of Iran, with the government’s regulation overturned, the authorities are set to show the green light for the release of the vehicles sometime in the coming days.
While the public is bewildered by a staggering death toll nationwide caused by air pollution, yielding to the mounting pressure from vested interests, government’s green policies are being terminated one at a time.
