Chinese Car Imports Raise Hackles

Chinese Car Imports Raise HacklesChinese Car Imports Raise Hackles

This week, Persian Khodro, a leading automotive Persian-language news site wrote a stinging article in response to a previous piece by a local auto industry expert. The original article, written in ISNA, criticized both Iranian car importers and Chinese automotive groups for their unfair pricing of Chinese cars in Iran.

The article said the price a Chinese person would pay for the same vehicle in Beijing is far less than what Iranians are paying for the same car. It said that the difference in yuan, the Chinese currency, and rial price, the local Iranian currency, was stunning and at times difference in pricing reaches at least 30%, but did not highlight the other reasons afflicting the pricing difference.

Persian Khodro's article, however, said the former's interpretation of the vehicle prices was rather simplistic and missed many factors impacting the price of vehicles being imported to the Islamic Republic.

The writer points to a series of price altering factors between China and Iran, which increase the price of the vehicles by the time they arrive on Iranian forecourts.

The article goes on to say the online price in China is without value added tax and does not include shipping costs.

It adds that cars assembled in China require fewer extras as Chinese owners have lower requirements when purchasing a new vehicle. In Iran, however, owners are more likely to request all the options, including leather seats, entertainment systems, airbags and automatic engines, which cost more.

The Persian Khodro article says, for example the base price for Lifan X60 SUV in China is 317 million rials ($9,600 at market rate) which does not incur an import tariff like those in Iran.  It also notes that the same vehicle in Iran with the added taxes and options works out at 550 million rials ($14,500), marking a 30% increase in cost to the end user.

Prices for Chinese cars in Iran have fallen dramatically over the past 12 months, with more entrants joining the race for Iranian buyers every month.

As of July 2015, several Chinese automakers have set up local dealerships, as they partner with third-party dealers. In total, over 11 Chinese car brands are on offer in Iran, with the remainder being imported by the unofficial car dealers.

In addition to the import of Chinese vehicles, Saipa, Iran's second largest auto manufacturer has begun production of complete knock-down kits of Beijing's Brilliance vehicles. The two models on offer are the H330 and H230 models, medium-sized vehicles in both hatchback and sedan versions.

Iran Khodro, Iran's oldest and largest carmaker, has also begun operations to team up with Chinese automakers, offering a wider range of affordable vehicles to Iranian and regional buyers.  

The price of locally produced Chinese vehicles is often up to 50% less than other models imported into the country.