Spotlight on Vehicle Imports

Spotlight on Vehicle Imports
Spotlight on Vehicle Imports

Among the plethora of troubles that paralyze the local auto market, criticism has been mounting regarding the excessive import of luxury cars in an industry that is grappling with more than just a few troubles.

Officials have repeatedly warned that lack of working capital hampers local manufacturing, carmakers are unable to pay their debts to auto part makers and several thousand jobs are on the line, Donyaye Eqtesad reported on Saturday.

While local auto manufacturers strive to survive, luxury cars are now a common sight on the streets. In spite of the fact that the Ministry of Industries, Mines and Trade banned the import of luxury cars last year, Porsches, Mercedes Benzes, BMWs and Maseratis in Iran are almost as easy to spot as Chinese cars.

Recently, Iran’s traffic police deployed teams in Tehran’s wealthy northern neighborhoods targeting drivers of luxury cars after a fatal crash involving a Porsche drew widespread criticism.

Police impounded 47 luxury cars for “causing problems and danger,” in a span of seven hours on the night of May 7, ISNA reported, citing Hassan Abedi, the deputy head of Tehran’s traffic and highway police.

The crash prompted the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei to urge police to combat the “psychological insecurity” of those driving luxury cars.

The incident also gave opponents of the Hassan Rouhani administration more ammunition to bash the government for the increased imports of mid-range and luxury cars with engines over two liters.  

The Trade Promotion Organization of Iran has recently responded by dismissing the claims as "false accusations" and released supporting data.

The data on car imports in the previous Iranian calendar year (ended March 20) indicates that less than 0.5 percent of the total cars imported had engines over 2.5 liters.

The report states that during the previous year, following the approval of the former administration, 711 vehicles with engines over 2.5 liters were imported. Over two-thirds of the cars were given to the police force and 25 to embassies and international non-governmental agencies.

In other words, aside from police cars and diplomatic vehicles, 186 luxury cars have been imported, the orders for which had all been placed before the import of luxury cars was banned, the report claims.

As western imposed sanctions were reinforced on Iran due to its nuclear energy program during the second term of former president Mahmoud Ahmadinejad, a ban was placed on imports of luxury goods (including cars) to reduce foreign exchange from exiting the country.

According to the TPO report, during the same time that the ban on imports of luxury cars was in place, 1000 luxury vehicles with engines over 2.5 liters were released from customs administrations overnight in March 2013.

"Over $2.5 billion exited the country during the second presidential term of the Ahmadinejad administration, for the import of luxury cars alone. Critics have chosen to turn a blind eye on the performance of the former administration," it said.