The Iranian car market is rife with speculations about the brands and models approved for import, but the ground reality is that the import of 100,000 sedans touted by officials will not materialize in the current Iranian year (ending March 20, 2023).
A few car import companies had claimed that orders have been registered and Italian, Japanese, South Korean and Chinese brands are going to enter Iran soon (while others disputed them). Since then, the names of Fiat’s 500 and Tipo, Hyundai’s Elantra, Kona and i10, Dongfeng’s Aeolus and three Changan models have been circulating in the media as prospective imports, Donyaye Khodro reported.
However, SAIPA, a major automaker, announced that it will import three Changan models, namely CS35 Plus, CS55 Plus and UNI-T.
SAIPA’s Deputy Purchasing Manager Kourosh Kaman-Kesh said on Dec. 20: “Since Changan is ready to produce these vehicles and its first consignment, consisting of 100 CS35 Plus and CS55 Plus, will be shipped to Iran in the next two weeks. We are currently negotiating with the Central Bank of Iran to pay the company.”
Earlier, Industries, Mining and Trade Minister Reza Fatemi-Amin had announced that 200,000 vehicles will be imported in the next six months.
“As per the plans, 100,000 cars will be imported in the fourth quarter of the current fiscal year [Dec. 22-March 20, 2023] and another batch of 100,000 vehicles will be imported in the next fiscal year’s first quarter [March 21-June 21, 2023],” he said.
As SAIPA doesn’t have the resources to import even 100 cars, the import of such a large number of cars will depend on the allocation of CBI funds.
The SAIPA official noted that once the foreign currency transfer is finalized, 4,000 more will be imported monthly over the next three months.
Kaman-Kesh said agreements have been reached to import 2,000 UNI-T models that will probably enter the domestic market from the next fiscal year’s second month (April 21-May 21, 2023).
“Currently, a consignment of these models has been shipped to Iran for trials. After preparing the documents for presenting them to the Institute of Standards and Industrial Research of Iran to obtain the necessary approvals, the import procedures will be carried out,” he said.
In view of the procedures involved, the import of 100,000 cars will not happen before March 20, 2023.
Imported Vehicles Will Not Belong to ‘Economy’ Class
Economy cars are a priority for imports, but in case costlier cars are imported, they will be subjected to the luxury car tax, the Ministry of Industries, Mines and Agriculture has announced.
However, given the fact that the final price of imported cars will be 120-140% higher than the initial price and they will be subjected to the luxury car tax, it becomes obvious that none of the imported cars would be considered an economy car.
In an interview with Donyaye Khodro, Morteza Afqeh, an economic analyst, said as per import regulations, the import of cars with a maximum price of €20,000 are permitted, although those priced under €10,000 are considered economy cars and enjoy import priority.
“It will be Iran Mercantile Exchange’s responsibility to set the prices of imported cars,” he added.
Asked about the profit margin of these cars, the analyst said, “According to the directives of the Industries Ministry, imported cars will enter IME with a 15% profit added to the final price. Therefore, the base price of imported vehicles can be estimated. Of course, other costs such as tariffs, car scrap and logistic fees will also be added. With these costs, about 120-140% will be added to the final price.”
Commenting on the final price of imported vehicles costing less than €10,000, Afqeh said, “A car valued at €10,000 at the Nima rate of each euro priced at 296,290 rials will amount to 2.92 billion rials [$7,845]. Now, if we consider the average final price to be 130% higher, it will reach 6.81 billion rials [$18,296]. By taking into account the 15% commercial profit, the car’s price in IME will be approximately 7.83 billion [$21,037].”
Calculating the final price of imported vehicles worth €20,000 in IME, the analyst said, “According to the price limit set for car imports, a €20,000 vehicle based on the Nima foreign exchange rate will be priced at 5.92 billion rials [$15,905] and the total price, including insurance costs, freight, customs duties, etc., will amount to 13.62 billion rials [$36,693]. Therefore, this car will probably go to IME with a base price of 15.67 billion rials [$42,101] and the profit determined for this car will be 2.35 billion rials [$6,313].”
Afqeh noted that the impact of car imports will become evident when these products are released in the domestic market.
“The expectations of buyers who have the financial ability to purchase products worth more than 15 billion rials [$40,300] should be checked, because these cars will not be included in the economy car category,” he said.
