The prices of imported vehicles have increased in excess of $1,000 in the last few weeks, according to reports from several news agencies in the country.
This was a result of new government regulations that stipulated the sale of cars by official representatives only, which was meant to help consumers but ultimately had an opposite effect and caused a price hike.
The Islamic Republic of Iran Customs Administration (Gomrok as it is called locally) made the matter worse by imposing new tariffs on imported cars that also contributed to the rise in prices, reported Khabar Khodro, a local automotive website, on September 3.
Gholamhossein Qasemian, vice president of Iran’s Auto Dealers Union, said the new tariffs do not affect previous imports retrospectively, but some dealers have exploited the opportunity and raised the prices of all imported cars.
“This will intensify the stagnation that the imported car market has been experiencing,” he said. The official confirmed the general malaise in the market, such that several foreign carmakers, mainly Europeans and Japanese, witnessing a slowdown in sales.
SAIPA, Iran’s second biggest auto manufacturer, Kerman Motors and Modiran Vehicle Manufacturing Company all raised their prices of several models recently, Eghtesad News reported on August 27.
Qasemian noted that prices have been raised, despite the long-lasting stagnation in Iran’s auto market.
With the lifting of western sanctions against Iran, several deals were signed with international automakers and many pundits predicted a decline in prices. However, things on this front are moving slowly for reasons that are beyond the scope of this article.
In fact, the three automakers recently hiked prices against all commonsense approach and analysis. Earlier in August, Iran’s Ministry of Industries, Mining and Trade also raised import tariffs for Chinese auto parts.
The ministry might have hiked the tariffs to support Iranian automakers following the new joint venture agreements signed with foreign companies such as Peugeot, Citroen and Renault.
Nevertheless, prices of cars produced by Iran Khodro, the largest domestic car manufacturer, have remained stable.
According to government rules, the main preconditions for foreign automakers to invest in Iran’s auto industry are to bring in the knowhow, manufacture vehicles with 20% domestic component and export 30% of the vehicles.
