This article was originally published by Radio Free Europe/Radio Liberty and is reprinted with permission.
With demand surging for new automobiles in Iran, the government took steps last year to reverse a long-standing ban on the import of foreign cars. But while the move was seen as a road to meeting customer needs, the initiative has mysteriously stalled.
The situation leaves consumers with little choice but to keep waiting in line for the opportunity to buy domestically produced vehicles in support of an industry accused of rampant corruption and putting “death wagons” on the road.
Iran banned the import of Western passenger cars in 2017 to counter the impending reimposition of U.S. sanctions over its nuclear program. The idea was part of Tehran’s efforts to develop a “resistance economy” that could both serve Iranians’ demands for cars, lessen dependence on foreign technology, and potentially boost export revenue.
But the idea has not worked as planned.
Auto production has fallen significantly in the country. And despite growing complaints about abnormally high prices and concerns about the quality and safety of domestically produced cars and Chinese imports, there are far more potential customers than available vehicles.
To alleviate the problem, parliament in the new budget allocated funds for the import of 70,000 Western passenger cars, including 20,000 hybrid or electric vehicles. But after revisions were demanded by the Guardians Council, which must approve all proposed legislation, the clause regarding the import of Western passenger vehicles was omitted, with little explanation.
With vehicle production flagging, and aging fleets hampering the transport and busing sectors, getting the automotive industry back on track was seen as one of ultraconservative President Ebrahim Raisi’s major challenges.
Since taking office in August, Raisi has tried to rally auto workers, including during a visit to the Pars Khodro auto factory, which has suffered production halts after the pullout of its French partner Renault due to U.S. sanctions that were reimposed by Washington in 2018.
During his speech at the factory in the city of Shiraz on March 2, Raisi criticized extraordinarily high car prices and outlined a raft of planned fixes for the domestic industry, including a 50 percent increase in car production over the next year, the transfer of government management of auto companies to the private sector, and the incorporation of technology and know-how from the defense and space industries into automobile production, including electric and self-driving vehicles.
He also blasted the poor quality of domestic cars, many of which are derived from old foreign models and have been criticized for shoddy engineering that has led to drivers’ deaths.
In a high-profile case in the city of Behbahan, in the country’s southwestern province of Khuzestan, investigators determined, following a massive pileup in January, that the airbags in nearly 60 Iranian vehicles had failed to deploy, resulting in five deaths.
“What kinds of cars do we have? Why do we produce death wagons?” asked traffic police chief Kamal Hadianfar, referring to a commonly used description of Iranian cars. “Why are standards not met?”
Other domestically produced vehicles have performed poorly in crash and stability tests, and some are reportedly prone to catching fire.
The industry also faces persistent allegations of corruption owing to a complex “car mafia” that critics say was formed under the pretext of circumventing U.S. sanctions and has thrived under Iran’s domestic monopoly and lack of government oversight.
In one ongoing case, top executives of two major parts manufacturers are accused of paying out bribes to trade and safety authorities to keep foreign vehicles from being imported, and to maintain the production of antiquated car models. The circumvention of proper inspections, according to Iranian media, allowed substandard parts to be imported from China and sold as Iranian-made at engineered prices.
Carmakers have also been accused of stockpiling new cars and favoring specific dealerships within their networks to sell them at higher prices.
The reintroduction of foreign car imports was seen as way of both improving the pool of quality automobiles and meeting consumer demand, while also boosting revenue for Iran’s struggling economy. The measure would have allowed the importation of vehicles costing less than 25,000 euros (about $27,000), which would have been heavily taxed.
But while the importation of much-needed trucks and buses was entered into the next budget proposal, the clause regarding passenger cars did not make it through.
In offering an explanation, parliament speaker Mohammad Baqer Qalibaf said that while the objections of the Guardians Council had been addressed, new concerns were raised by the Expediency Council, which mediates between the Guardians Council and parliament and serves as an advisory body to the supreme leader.
If the objections cannot be worked out, the importation of passenger cars will reportedly be nixed.
“Some interests are tied to the interests of the carmakers and they do not allow this monopoly to be broken,” alleged Jalal Rashidi Kochi, a member of the parliamentary Internal Affairs and Councils Commission.
