Economy, Business And Markets

New Law Regulates Imported Car Prices

New Law Regulates Imported Car PricesNew Law Regulates Imported Car Prices

As of this week car importers are officially required to observe new rules announced by the ministry of industry, mine, and trade while setting prices of imported cars.

In late January, Industry Minister Mohammad-Reza Nematzadeh passed a resolution according to which cars could only be imported through the official representatives of foreign carmakers whose licenses have been registered in the ministry.

The resolution was supported by Article 4 of Iran’s consumer protection law which states that all imported durable consumer goods, including cars, are required to have official representative companies and guarantee services at home. Despite the law’s explicit statement, more than 50% of foreign cars have so far been imported through individuals or entities other than the official representatives. This resulted in numerous problems for car owners with regards to the supply of spare parts and after-sale technical services.

In the past few years, the prices of cars imported through official representative companies have been 10 to 15 percent higher than those imported unofficially. The new law, which came into effect Saturday, will prohibit all entities from importing cars, permitting only 30 representative companies to import under their brand names.

According to the new regulations, official companies must observe multiple factors in setting prices, including: the vehicle’s Cost, Insurance and Freight (CIF) value, import duties and tariffs, the differential value added tax (VAT), inspection costs, shipping and port tariffs, insurance and other taxes.

Earlier, the authorities had also prohibited the import of cars with engine displacements of more than 2000 cc to help protect the domestic car industry and reduce fuel consumption.