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Iran Might Resume Importing Cars

Iran -- Iranian President Hassan Rouhani visiting a car factory on February 19, 2020.

The Iranian government has banned the importing of cars for the past two years, Iranian car manufacturing companies have grabbed the chance to entirely monopolize the local market.

However, two developments have raised the possibility of the resumption of car imports next year. The first is allocating a share for importing vehicles in the government's newly proposed budget.

The secretary of the Iranian Automobile Importers Association, Mehdi Dadfar, says, "In the government's budget for the next Iranian calendar year, 1400, (March 20, 2021-22), President Hassan Rouhani's administration revenue from car import duties is estimated at twenty trillion rials, (approximately $475 million at subsidized official price) with which several thousand cars can be imported."

Currently, about 3,000 vehicles are still stockpiled in customs warehouses across Iran, and some have attributed the budget line to the clearance of these cars. Of course, the release of these automobiles may be a prelude to the widespread import of vehicles, with the allocated budget for importing cars exceeding the value of the cars stored in customs warehouses.

Meanwhile, the Iranian Majlis parliament is also planning to present a parliamentary motion to resume importing cars. The spokesman for the parliament's Industries and Mines Commission, Hojjatullah Firouzi, says, "The parliament has four conditions for importing vehicles aimed at organizing the local car industry. In the planned motion, the importers should offer their automobiles on the stock exchange."

Furthermore, Firouzi says, "Under the parliamentary bill, only the individuals and automakers who import cars have the right to export automobiles. They are permitted to import cars as much as the vehicles they ship. Part manufacturers can also import cars equivalent to the value of the products they export."

Some critics argue that the parliament's bill could encourage Iranian automakers to follow domestic cars' policy and apply it to imported vehicles. Many are already criticizing Iranian automakers for stockpiling more than 100,000 cars to increase their prices.

Resuming the import of cars aims to balance the Iranian car market and eliminate Iranian carmakers and parts manufacturers' absolute monopoly.

Nonetheless, with the conditions set by the planned parliamentary bill, nothing will be changed.

According to Firouzi, other people who can also import vehicles, "Real non-governmental persons who buy, export, and sell oil can also import cars, using their earned hard currencies. Moreover, people who have deposited foreign currencies abroad, and do not owe the government, may import vehicles, as well," Firouzi noted.

The motion will exempt hybrid cars and vehicles with dual fuel consumption from being offered on the stock exchange, Firouzi said. "Thus, the auto manufacturers will be encouraged to produce more hybrid vehicles. Simultaneously, the government will provide domestic car manufacturers with low-price facilities to research and upgrade the quality of local products."

Despite such remarks, it is still unlikely that cars will be widely imported to Iran next year since the fate of the JCPOA is still undecided. Moreover, even if Washington rejoins the nuclear deal, it will take several months for foreign automakers and importers to make necessary arrangements for selling their products to Iran.

Meanwhile, Iranian state-owned carmakers are making every effort to stop vehicle imports by putting pressure on the Ministry of Industry, Mines, and Trade. With importing cars' resumption, the local automakers can no longer market some of their most expensive products.

Currently, the homemade Dena Plus Turbo car is priced at about $20,000 in the Iranian market, while it is offered at only $12,000 when exported.