VW Finds a Warm Welcome in Tehran

Volkswagen distributor in Iran Mammut Khodro started presales of two models,  Tiguan and Passat, in Tehran last week. The cars found a warm welcome.

“In less than 24 hours, Mammut presold 2,000 units of the two models,” local automotive website Persian Khodro quoted the company’s sales director Mona Noorian as saying.

The noteworthy sales by the German carmaker means it has been able to claim a 4% share of the domestic imported car market in less than a day. According to data released by Iran Auto Importers Association, close to 50,000 cars entered Iran during the nine months to Dec. 21.

Compared to other major international carmakers VW is a latecomer to the huge local car market. With implementation of the nuclear deal in January 2016 and easing of economic sanctions, major international carmakers made a foray into Iran. Companies like Peugeot, Citroen, Renault, Hyundai and Mahindra forged joint production deals with local carmakers and firms like Taiwan’s Luxgen and Germany’s Borgward introduced official representatives.

VW has had an inconsistent presence in Iran. Prior to the imposition of sanctions, local automotive company Kerman Motor assembled VW’s hatchback model, the Brazilian-designed Gol. The assembly lines were shut down in 2010. Later, Mammut imported the New Beetle, Golf and Passat models, the imports were also halted later.

However, VW’s success in the market does not come as surprise. According to a survey conducted by Iran Standard and Quality Inspection Company, German cars are the most popular among Iranians. The relatively low price of VW cars compared to its German peers in Iran market has apparently given the company a competitive edge. Cars produced by Mercedes-Benz Ag are sell for 7.9 to 9.3 billion rials in Iran ($184,000 to $216,000).

ISQI is a private company that conducts monthly auto quality and safety tests on behalf of the Ministry of Industries. The agency conducted its latest survey on the sidelines of the Tehran International Auto Show (Nov. 27 – Dec. 1) where 1,543 visitors were polled. According to the results, 27% said they prefer “made in Germany” cars to all others, followed by Japanese (20%), French (19%) and South Korean (14%) brands.

Mammut is charging 2 billion rials ($46,500) as down payment for the two models. The remaining must be paid at the time of delivery. According to the company’s sales office, the cars will be delivered in four weeks.

Mammut has priced the small SUV Tiguan 2.8 billion rials ($67,000).  A 184-hp turbocharged 2.0-liter inline-four engine propels the car’s drivetrain and mates with an eight-speed automatic transmission and either front- or all-wheel drive. The car’s price starts from $31,000 in the international market.

The German automaker’s midsize family sedan Passat is tagged at 2.7 billion rials ($63,000). The model is equipped with a turbocharged 1.8-liter, a 180-hp engine attached to a 7-speed DSG transmission. In their own country Germans buy the same car for $23,000.

 VW Global Sales

Volkswagen group sales probably rose to around 10.7 million cars last year and kept the German behemoth ahead of Toyota as the world’s largest automaker, Bild am Sonntag reported, citing in-house VW estimates.

Since news about the company diesel emissions test cheating scandal broke in 2015, VW has been struggling to keep up its sales. The company installed secret software in vehicles in order to elude emissions tests. Better known as Dieselgate the scandal has cost VW about $30 billion.