The number of imported cars, which has been discussed intermittently by the Majlis Joint Commission as part of the fiscal 2022-23 budget bill, has been ratcheted up to 70,000.
This issue has now been referred to the parliament for final ratification.
According to the latest resolution of this commission, the proposal to import 70,000 cars, which was announced two weeks ago, has been approved and added to the budget bill, the news portal of Car.ir reported.
The issue of importing 50,000 passenger cars, which had been initially pitched in the fiscal 2022-23 budget bill and approved by the Majlis Joint Commission during the bill’s review, has been reexamined.
"Last night, there was a discussion about this issue and the numbers related to it were corrected,” Jafar Qaderi, a member of the commission, told Tasnim News Agency.
Qaderi noted that although the commission had previously discussed the elimination of passenger car imports from the budget bill, a number of deputies believed that the parliament should take up this issue.
“Some lawmakers believed that we should not get involved in the issue again because the Expediency Council has not yet taken up the Majlis plan to import cars. Therefore, there were disagreements in this regard, but in the end, the proposal received a positive vote from the commission,” he added.
The Expediency Council arbitrates on issues disputed by the government and the parliament, so how it could intervene in this issue even before the parliament had voted on it is unclear.
Mohammad Reza Mirtajeddini, chairman of the Targeted Subsidies Committee of the commission, commented on the imported items in the supplementary Note 7 and said, “Imported items will include 50,000 passenger cars and 20,000 hybrid and electric cars, 10,000 trucks, trailers, refrigerated trucks and vehicle pullers, as well as 10,000 suburban and inner-city buses.”
Mirtajeddini noted that the import of 1,000 ordinary and refrigerated wagons, as well as 5,000 heavy road construction machinery that are a maximum of 5 years old, has also been approved.
Import of 50,000 Cars Unlikely
After the Majlis Joint Commission approved the import of 50,000 passenger cars in the next fiscal year (starting March 21), some experts doubt the feasibility of this legislation.
"Even if the cars are imported and all restrictions are removed, it is still not possible to reach this figure," an automotive expert opined.
“Even if the same 50,000 passenger cars are imported, the government will not earn 600 trillion rials,” Farbod Zaveh was also quoted as saying by Donya-e-Khodro.
"Previously, the commission had assigned 12 billion rials for each car, which showed that 50,000 Porsches must be imported to achieve such an income. But this was not possible and perhaps for the same reason, they changed the type of imported cars from passenger vehicles to commercial vehicles,” he added.
Zaveh noted that it is not possible to import 50,000 cars into the country, so we can only count on the import of 5,000 commercial vehicles a year.
The expert also said that it seems unlikely that the funding will be provided.
“The same 5,000 commercial vehicles also need close to €500 million in funding, which is a noticeable figure … The Iranian economy is very small and this figure is very large. It is even unlikely that we will be able to import 5,000 units a year," he added.
Government Revenue Will Be One-Third of the Forecast
The expert said the government's revenue from these 5,000 units is 3-4 billion rials per vehicle, even at the 200,000 rials per $1 exchange rate, based on the 15-20% tariff.
"Even if the same 50,000 vehicles are imported, it is not possible to achieve the expected revenue of 600,000 trillion rials," he said.
“In the best-case scenario, the import of passenger cars will generate 250,000 trillion rials, provided that the restrictions on the import of American models and the condition of dealerships are removed, otherwise any restrictions will reduce this income.”
Noting that people’s purchasing power is not high, Zaveh said, “The elimination of the car age requirement of 3 years for imports and increasing it to 5 years is a positive step, but this will not affect government revenue."
