Automotive experts believe car imports will not have a noticeable impact on Iran’s car industry, as the price of foreign cars will be much higher than that of domestic ones.
They believe that the price of imported cars will exceed 9 billion rials, considering the country's foreign currency conditions and the customs tariff.
In this regard, Yousef Haqiqi, a member of the Association of Homogeneous Propulsion Industries and Component Manufacturers, said car imports cannot threaten domestic production, Donyaye Khodro reported.
“As domestic cars are mainly in the price range of 3-4 billion rials, imports will not reduce the domestic car prices,” he said.
Experts also grappled with the issue of pricing method, wondering whether the domestic car market will become more competitive when cars import are liberalized.
Haqiqi said the growth and development of automotive and parts industries are not spurred by car import but through the elimination of command pricing, as the transfer of the pricing process to automakers, in addition to ensuring a reasonable profit, will reduce the difference between the market and factory car prices.
By increasing the tariff on imported parts that can be produced domestically, it is possible to prevent the import of these parts. On the other hand, the reduction of import tariff on raw materials required by parts manufacturers will support domestic production.
The next issue was whether the liberalization of car imports in exchange for the export of cars and parts will benefit domestic automakers.
Haqiqi said this calls for extending incentives to auto parts manufacturers.
“By holding international exhibitions, component makers can introduce their products to target markets and the government can also help market their products by covering the cost of holding the exhibition,” he added.
The last question pertained to the marketing strategy for the domestic automotive and parts industries.
Participation in international and specialized exhibitions should be a regular feature.
The Ministry of Foreign Affairs can also help introduce the capacities and potentials of the country's parts industry overseas for promoting exports.
Lower Tariffs for More Economical Imported Cars
After announcing the decision to lift the car import ban, the government is encouraging the import of more economical vehicles.
"Under the new regulations, in addition to the top two deciles, car imports have also been considered for low-income deciles. Special incentives, including lower tariffs, will be extended to the importers of such cars," Manouchehr Manteqi, deputy industries minister for transportation affairs, said.
"People who observe the production processes and transfer knowledge can enter the import business. The government’s new regulation has focused on after-sales services and technology transfer alongside imports," he added.
Manteqi noted that the import of special cars, especially electric vehicles, has received special attention.
“Another issue in this regulation is that anyone investing in the car value chain [parts and components] can import a car in return for the investment he makes in the car value chain. Also, those who export a range of products can import in exchange for export with the permission of the Central Bank of Iran," he said.
"The range of products that most customers use can also be imported, provided that they have a higher quality than domestic products. So, domestic automakers will have to increase the quality of their products if they want to compete with them."
Manteqi stated that due to the 40% increase in exports last year, currency restrictions have also been lifted.
Referring to the lifting of car import ban, Minister of Industries, Mining and Trade Reza Fatemi-Amin said, “Following the removal of export barriers and the rise in exports, which helped solve the problem of the country's foreign currency balance, we no longer need to continue the ban on car imports and called for the liberalization of imports to create a competitive market. By holding several meetings with relevant authorities and the Cabinet, we seriously pursued the liberalization of car imports away from the media hype.”
Fatemi-Amin explained that finally, with the submission of expert reports, presentation of logical arguments and constant follow-ups, the ministry’s proposals were approved by the Cabinet.
