While the Ministry of Industries, Mining and Trade has banned the import of cars made in France, French car manufacturers can enter Iran for joint production ventures, according to an automotive official familiar with the matter.
Peugeot and Renault had production deals with Iranian automakers, but quit the country when the US intensified sanctions against Iran.
Following the recent Iranian decision to allow the import of a limited number of economy cars, Iran’s Industries Ministry has clarified that the ban on French-made cars is only for the import of Completely Built Up (CBU) units, but it will welcome joint ventures for the production of cars or parts, Donyaye Khodro reported.
This is especially significant, as the economy cars of Iran Khodro and SAIPA, major Iranian carmakers, are based on Renault’s KWID and Citroen C3 platforms respectively.
According to Mohammad Reza Najafi-Manesh, chairman of the Business Facilitation Commission of Tehran Chamber of Commerce and the head of the Board of Directors of the Association of Homogeneous Propulsion Industries and Component Manufacturers, French car manufacturers do not have a problem with the Industries Ministry’s conditions for cooperation, but they are waiting for the results of talks related to the Joint Comprehensive Plan of Action (Iran nuclear deal) and the Financial Action Task Force, since sanctions prevent the transfer of foreign currency with Iran through international banking channels.
“The Industries Ministry is not against the entry of French automakers to produce cars in Iran, but rather welcomes this action. What has been announced is the ban on importing French CBU units, otherwise it is possible to cooperate with them in starting production lines for cars or parts,” he said.
Najafi-Manesh explained that on the one hand, car importers have to comply with 85 automotive standards and on the other hand, the imported car should be priced under €20,000, which call for serious considerations.
“My opinion is that a maximum of about 5% of the import share could be allocated to cars with higher prices. Because in any case, there are people in our society who will seek to buy more expensive cars,” he said.
Car Import Registration Underway
The government has done its duty regarding car imports and applicants are expected to undergo the procedures speedily so that new cars could enter Iran soon, the industries, mining and trade minister said.
Reza Fatemi-Amin also told IRNA that the relevant regulations have been approved and coordination has been made with the Institute of Standards and Industrial Research of Iran, the Department of Environment and other relevant institutions.
“Individuals and companies have submitted their applications for imports and if they encounter any problem, we are ready to solve them,” he said.
The minister stated that car importers must guarantee after-sales service, or be an official representative, or transfer technology, and these are the main conditions for importing cars.
Previously, the deputy minister for transportation affairs had announced that 90,000 vehicles are expected to enter the country by the end of the year.
“As per the regulations, priority will be given to cars costing less than €10,000, and then to cars in the price range of €10,000 to €20,000,” Manouchehr Manteqi was also quoted as saying by Otaghiranonline.
He called on the Central Bank of Iran to pave the way for the allocation of €1 billion in credit facilities for car importers.
“The cars will be imported not be only from Chinese car manufacturers, but also from South Korean and Japanese automakers,” he added.
Manteqi noted that the pricing of imported cars will take place in the stock market based on supply and demand, “which will control their price better”.
“Although it has been emphasized that [only the import of] economy cars will be allowed, the prices of these cars will not necessarily be low or cheap because they will be offered through the stock market,” he said.
