Last week, President Ebrahim Raisi’s cabinet finally approved a regulation to import foreign-made road vehicles, more than four months after his government initially gave the import a green light. Raisi’s predecessor, President Hassan Rouhani, had in July 2018 formally banned cars imported in Completely Built Unit (CBU) format, allowing only the Completely Knocked-Down (CKD) format where cars are imported in parts, not assembled unit. The decision was a reaction to a unilateral withdrawal by the United States from the country’s 2015 nuclear deal with world powers months earlier, which was followed by waves of comprehensive economic sanctions that also triggered a currency crisis. As major Western partners withdrew from the Iranian market, the move also left the door open for CKD imports of a variety of Chinese vehicles, which have since flooded the market. However, a large share of the market remains under the control of a small handful of local automakers. chief among them state-owned Iran Khodro, which has been responsible for manufacturing inferior quality cars that are also becoming increasingly unaffordable due to the currency crisis and the rampant inflation that followed it. Police authorities and experts have also blamed some of the local cars for the extremely high fatality rates in the country – especially the old models that still prevail, such as SAIPA’s decommissioned Pride, which became infamous as the ‘death chariot’ » due to his presence in accidents. Many of the Chinese cars imported with CKD are also out of reach for the average Iranian as they reach the hands of consumers at exorbitant prices – often more than double the actual prices – due to high import duties, ostensibly for protection and incentives in local production.
No “luxury” import.
In this environment, some hoped that the regulation on new imports would signal a policy about face, opening the market to large numbers of higher quality vehicles. But with Washington’s sanctions still squeezing Iran’s foreign currency income streams and affordability remaining a major issue, the government has devised regulations it said are aimed at avoiding “luxury” imports. First, the statute approved by the ministerial law stipulates that only 1 billion euros ($1 billion) will be allocated for imports through the Central Bank of Iran, and all imported cars must have a maximum value of 20,000 euros, with cars worth less than 10,000 euros is given the highest priority for the benefit of the average consumer. This automatically excludes many popular models from leading global brands and means that a maximum of 100,000 cars will be imported into Iran. Only hybrid or pure electric cars can be imported into special commercial or industrial zones, with importers tasked with investing in and setting up charging stations, according to the government. The government regulation also states that local manufacturers will be incentivized to include imports of technology and parts to improve their own practices. A worker inspects the body of a car at the Iran Khodro car manufacturing plant just outside Tehran, Iran [File: Vahid Salemi/AP Photo]
The nuclear deal factor
The first vehicles are expected to enter the country within months, ahead of the launch of Iran’s current calendar year in March 2023. Government officials said negotiations had been held with Western companies, in addition to those in China and India, without elaborating. The government regulation also leaves the door open to foreign investment, saying sedan cars can be imported through foreign investment, but only if they are to be used in public transport. However, despite its potential, investors are hardly lining up to set up shop in the Iranian market as it will be susceptible to secondary US sanctions. Iran and the US have been negotiating indirectly since April 2021 to restore the 2015 nuclear deal. If they reach an agreement, most sanctions on Iran would be lifted in exchange for reinstating restrictions on the country’s advanced nuclear program. But even if the nuclear deal is reinstated, Iranian officials have warned in recent years that former partners who abandoned their commitments to the Iranian market because of US sanctions will not find it easy to return. The sentiment is only reinforced by the growing focus on a doctrine of “resistance economy” defined by Supreme Leader Ali Hosseini Khamenei, which emphasizes local production and self-reliance.
“Not for the private sector”
Although the opening of imports is a positive development, the government’s conditions for importing new cars are very strict and limited, according to Ali Khosravani, who owns one of the country’s largest car sales and service companies. “This is better than nothing, but it misses a lot of important market opportunities,” he told Al Jazeera. Khosravani explained that the move could have a positive psychological effect on average consumers who may not necessarily want to buy, but would welcome the re-entry of newer models into the market. Imports, he said, could signal an opportunity to improve the market for midsize cars, but low price caps and other restrictions set out in government statute “put the final nail in that coffin.” “This statute was not written for the private sector, it was written so that some of the same companies that previously had contracts with foreign brands and imported cars can do so again,” Khosravani said, pointing to another government condition forcing importers to obtain direct import licenses from foreign manufacturers. Additionally, the government has yet to specify import duties or customs duties – which are expected to be determined after the cars are imported. Khosravani said more affordable prices in the Iranian car market will largely depend on whether the nuclear deal is reinstated, which will have a big impact on exchange rates and diversity in the market. “I would open imports to everyone so that all natural and legal persons can import cars,” he said of his own proposed model. It also proposed initial duty levels at 50%, which will be reduced for CKD and Semi-Knocked Down (SKD) imports and a move away from government currency, incentivizing average consumers to invest and also sell their unused vehicles purchased as store of value. “When talking about car imports, some people associate it with issues like class differences and inequality, saying that cars are only a concern of the rich. But that is not true, cars are everyone’s concern and if prices come down, everyone will benefit,” Khosravani said.
title: “Why Iran Is Ending A Years Long Ban On Car Imports News From The Automotive Industry Klmat” ShowToc: true date: “2022-12-17” author: “Shanna Chandler”
Last week, President Ebrahim Raisi’s cabinet finally approved a regulation to import foreign-made road vehicles, more than four months after his government initially gave the import a green light. Raisi’s predecessor, President Hassan Rouhani, had in July 2018 formally banned cars imported in Completely Built Unit (CBU) format, allowing only the Completely Knocked-Down (CKD) format where cars are imported in parts, not assembled unit. The decision was a reaction to a unilateral withdrawal by the United States from the country’s 2015 nuclear deal with world powers months earlier, which was followed by waves of comprehensive economic sanctions that also triggered a currency crisis. As major Western partners withdrew from the Iranian market, the move also left the door open for CKD imports of a variety of Chinese vehicles, which have since flooded the market. However, a large share of the market remains under the control of a small handful of local automakers. chief among them state-owned Iran Khodro, which has been responsible for manufacturing inferior quality cars that are also becoming increasingly unaffordable due to the currency crisis and the rampant inflation that followed it. Police authorities and experts have also blamed some of the local cars for the extremely high fatality rates in the country – especially the old models that still prevail, such as SAIPA’s decommissioned Pride, which became infamous as the ‘death chariot’ » due to his presence in accidents. Many of the Chinese cars imported with CKD are also out of reach for the average Iranian as they reach the hands of consumers at exorbitant prices – often more than double the actual prices – due to high import duties, ostensibly for protection and incentives in local production.
No “luxury” import.
In this environment, some hoped that the regulation on new imports would signal a policy about face, opening the market to large numbers of higher quality vehicles. But with Washington’s sanctions still squeezing Iran’s foreign currency income streams and affordability remaining a major issue, the government has devised regulations it said are aimed at avoiding “luxury” imports. First, the statute approved by the ministerial law stipulates that only 1 billion euros ($1 billion) will be allocated for imports through the Central Bank of Iran, and all imported cars must have a maximum value of 20,000 euros, with cars worth less than 10,000 euros is given the highest priority for the benefit of the average consumer. This automatically excludes many popular models from leading global brands and means that a maximum of 100,000 cars will be imported into Iran. Only hybrid or pure electric cars can be imported into special commercial or industrial zones, with importers tasked with investing in and setting up charging stations, according to the government. The government regulation also states that local manufacturers will be incentivized to include imports of technology and parts to improve their own practices. A worker inspects the body of a car at the Iran Khodro car manufacturing plant just outside Tehran, Iran [File: Vahid Salemi/AP Photo]
The nuclear deal factor
The first vehicles are expected to enter the country within months, ahead of the launch of Iran’s current calendar year in March 2023. Government officials said negotiations had been held with Western companies, in addition to those in China and India, without elaborating. The government regulation also leaves the door open to foreign investment, saying sedan cars can be imported through foreign investment, but only if they are to be used in public transport. However, despite its potential, investors are hardly lining up to set up shop in the Iranian market as it will be susceptible to secondary US sanctions. Iran and the US have been negotiating indirectly since April 2021 to restore the 2015 nuclear deal. If they reach an agreement, most sanctions on Iran would be lifted in exchange for reinstating restrictions on the country’s advanced nuclear program. But even if the nuclear deal is reinstated, Iranian officials have warned in recent years that former partners who abandoned their commitments to the Iranian market because of US sanctions will not find it easy to return. The sentiment is only reinforced by the growing focus on a doctrine of “resistance economy” defined by Supreme Leader Ali Hosseini Khamenei, which emphasizes local production and self-reliance.
“Not for the private sector”
Although the opening of imports is a positive development, the government’s conditions for importing new cars are very strict and limited, according to Ali Khosravani, who owns one of the country’s largest car sales and service companies. “This is better than nothing, but it misses a lot of important market opportunities,” he told Al Jazeera. Khosravani explained that the move could have a positive psychological effect on average consumers who may not necessarily want to buy, but would welcome the re-entry of newer models into the market. Imports, he said, could signal an opportunity to improve the market for midsize cars, but low price caps and other restrictions set out in government statute “put the final nail in that coffin.” “This statute was not written for the private sector, it was written so that some of the same companies that previously had contracts with foreign brands and imported cars can do so again,” Khosravani said, pointing to another government condition forcing importers to obtain direct import licenses from foreign manufacturers. Additionally, the government has yet to specify import duties or customs duties – which are expected to be determined after the cars are imported. Khosravani said more affordable prices in the Iranian car market will largely depend on whether the nuclear deal is reinstated, which will have a big impact on exchange rates and diversity in the market. “I would open imports to everyone so that all natural and legal persons can import cars,” he said of his own proposed model. It also proposed initial duty levels at 50%, which will be reduced for CKD and Semi-Knocked Down (SKD) imports and a move away from government currency, incentivizing average consumers to invest and also sell their unused vehicles purchased as store of value. “When talking about car imports, some people associate it with issues like class differences and inequality, saying that cars are only a concern of the rich. But that is not true, cars are everyone’s concern and if prices come down, everyone will benefit,” Khosravani said.
title: “Why Iran Is Ending A Years Long Ban On Car Imports News From The Automotive Industry Klmat” ShowToc: true date: “2022-11-27” author: “Timothy Perrier”
Last week, President Ebrahim Raisi’s cabinet finally approved a regulation to import foreign-made road vehicles, more than four months after his government initially gave the import a green light. Raisi’s predecessor, President Hassan Rouhani, had in July 2018 formally banned cars imported in Completely Built Unit (CBU) format, allowing only the Completely Knocked-Down (CKD) format where cars are imported in parts, not assembled unit. The decision was a reaction to a unilateral withdrawal by the United States from the country’s 2015 nuclear deal with world powers months earlier, which was followed by waves of comprehensive economic sanctions that also triggered a currency crisis. As major Western partners withdrew from the Iranian market, the move also left the door open for CKD imports of a variety of Chinese vehicles, which have since flooded the market. However, a large share of the market remains under the control of a small handful of local automakers. chief among them state-owned Iran Khodro, which has been responsible for manufacturing inferior quality cars that are also becoming increasingly unaffordable due to the currency crisis and the rampant inflation that followed it. Police authorities and experts have also blamed some of the local cars for the extremely high fatality rates in the country – especially the old models that still prevail, such as SAIPA’s decommissioned Pride, which became infamous as the ‘death chariot’ » due to his presence in accidents. Many of the Chinese cars imported with CKD are also out of reach for the average Iranian as they reach the hands of consumers at exorbitant prices – often more than double the actual prices – due to high import duties, ostensibly for protection and incentives in local production.
No “luxury” import.
In this environment, some hoped that the regulation on new imports would signal a policy about face, opening the market to large numbers of higher quality vehicles. But with Washington’s sanctions still squeezing Iran’s foreign currency income streams and affordability remaining a major issue, the government has devised regulations it said are aimed at avoiding “luxury” imports. First, the statute approved by the ministerial law stipulates that only 1 billion euros ($1 billion) will be allocated for imports through the Central Bank of Iran, and all imported cars must have a maximum value of 20,000 euros, with cars worth less than 10,000 euros is given the highest priority for the benefit of the average consumer. This automatically excludes many popular models from leading global brands and means that a maximum of 100,000 cars will be imported into Iran. Only hybrid or pure electric cars can be imported into special commercial or industrial zones, with importers tasked with investing in and setting up charging stations, according to the government. The government regulation also states that local manufacturers will be incentivized to include imports of technology and parts to improve their own practices. A worker inspects the body of a car at the Iran Khodro car manufacturing plant just outside Tehran, Iran [File: Vahid Salemi/AP Photo]
The nuclear deal factor
The first vehicles are expected to enter the country within months, ahead of the launch of Iran’s current calendar year in March 2023. Government officials said negotiations had been held with Western companies, in addition to those in China and India, without elaborating. The government regulation also leaves the door open to foreign investment, saying sedan cars can be imported through foreign investment, but only if they are to be used in public transport. However, despite its potential, investors are hardly lining up to set up shop in the Iranian market as it will be susceptible to secondary US sanctions. Iran and the US have been negotiating indirectly since April 2021 to restore the 2015 nuclear deal. If they reach an agreement, most sanctions on Iran would be lifted in exchange for reinstating restrictions on the country’s advanced nuclear program. But even if the nuclear deal is reinstated, Iranian officials have warned in recent years that former partners who abandoned their commitments to the Iranian market because of US sanctions will not find it easy to return. The sentiment is only reinforced by the growing focus on a doctrine of “resistance economy” defined by Supreme Leader Ali Hosseini Khamenei, which emphasizes local production and self-reliance.
“Not for the private sector”
Although the opening of imports is a positive development, the government’s conditions for importing new cars are very strict and limited, according to Ali Khosravani, who owns one of the country’s largest car sales and service companies. “This is better than nothing, but it misses a lot of important market opportunities,” he told Al Jazeera. Khosravani explained that the move could have a positive psychological effect on average consumers who may not necessarily want to buy, but would welcome the re-entry of newer models into the market. Imports, he said, could signal an opportunity to improve the market for midsize cars, but low price caps and other restrictions set out in government statute “put the final nail in that coffin.” “This statute was not written for the private sector, it was written so that some of the same companies that previously had contracts with foreign brands and imported cars can do so again,” Khosravani said, pointing to another government condition forcing importers to obtain direct import licenses from foreign manufacturers. Additionally, the government has yet to specify import duties or customs duties – which are expected to be determined after the cars are imported. Khosravani said more affordable prices in the Iranian car market will largely depend on whether the nuclear deal is reinstated, which will have a big impact on exchange rates and diversity in the market. “I would open imports to everyone so that all natural and legal persons can import cars,” he said of his own proposed model. It also proposed initial duty levels at 50%, which will be reduced for CKD and Semi-Knocked Down (SKD) imports and a move away from government currency, incentivizing average consumers to invest and also sell their unused vehicles purchased as store of value. “When talking about car imports, some people associate it with issues like class differences and inequality, saying that cars are only a concern of the rich. But that is not true, cars are everyone’s concern and if prices come down, everyone will benefit,” Khosravani said.
title: “Why Iran Is Ending A Years Long Ban On Car Imports News From The Automotive Industry Klmat” ShowToc: true date: “2022-10-29” author: “Ryan Hyde”
Last week, President Ebrahim Raisi’s cabinet finally approved a regulation to import foreign-made road vehicles, more than four months after his government initially gave the import a green light. Raisi’s predecessor, President Hassan Rouhani, had in July 2018 formally banned cars imported in Completely Built Unit (CBU) format, allowing only the Completely Knocked-Down (CKD) format where cars are imported in parts, not assembled unit. The decision was a reaction to a unilateral withdrawal by the United States from the country’s 2015 nuclear deal with world powers months earlier, which was followed by waves of comprehensive economic sanctions that also triggered a currency crisis. As major Western partners withdrew from the Iranian market, the move also left the door open for CKD imports of a variety of Chinese vehicles, which have since flooded the market. However, a large share of the market remains under the control of a small handful of local automakers. chief among them state-owned Iran Khodro, which has been responsible for manufacturing inferior quality cars that are also becoming increasingly unaffordable due to the currency crisis and the rampant inflation that followed it. Police authorities and experts have also blamed some of the local cars for the extremely high fatality rates in the country – especially the old models that still prevail, such as SAIPA’s decommissioned Pride, which became infamous as the ‘death chariot’ » due to his presence in accidents. Many of the Chinese cars imported with CKD are also out of reach for the average Iranian as they reach the hands of consumers at exorbitant prices – often more than double the actual prices – due to high import duties, ostensibly for protection and incentives in local production.
No “luxury” import.
In this environment, some hoped that the regulation on new imports would signal a policy about face, opening the market to large numbers of higher quality vehicles. But with Washington’s sanctions still squeezing Iran’s foreign currency income streams and affordability remaining a major issue, the government has devised regulations it said are aimed at avoiding “luxury” imports. First, the statute approved by the ministerial law stipulates that only 1 billion euros ($1 billion) will be allocated for imports through the Central Bank of Iran, and all imported cars must have a maximum value of 20,000 euros, with cars worth less than 10,000 euros is given the highest priority for the benefit of the average consumer. This automatically excludes many popular models from leading global brands and means that a maximum of 100,000 cars will be imported into Iran. Only hybrid or pure electric cars can be imported into special commercial or industrial zones, with importers tasked with investing in and setting up charging stations, according to the government. The government regulation also states that local manufacturers will be incentivized to include imports of technology and parts to improve their own practices. A worker inspects the body of a car at the Iran Khodro car manufacturing plant just outside Tehran, Iran [File: Vahid Salemi/AP Photo]
The nuclear deal factor
The first vehicles are expected to enter the country within months, ahead of the launch of Iran’s current calendar year in March 2023. Government officials said negotiations had been held with Western companies, in addition to those in China and India, without elaborating. The government regulation also leaves the door open to foreign investment, saying sedan cars can be imported through foreign investment, but only if they are to be used in public transport. However, despite its potential, investors are hardly lining up to set up shop in the Iranian market as it will be susceptible to secondary US sanctions. Iran and the US have been negotiating indirectly since April 2021 to restore the 2015 nuclear deal. If they reach an agreement, most sanctions on Iran would be lifted in exchange for reinstating restrictions on the country’s advanced nuclear program. But even if the nuclear deal is reinstated, Iranian officials have warned in recent years that former partners who abandoned their commitments to the Iranian market because of US sanctions will not find it easy to return. The sentiment is only reinforced by the growing focus on a doctrine of “resistance economy” defined by Supreme Leader Ali Hosseini Khamenei, which emphasizes local production and self-reliance.
“Not for the private sector”
Although the opening of imports is a positive development, the government’s conditions for importing new cars are very strict and limited, according to Ali Khosravani, who owns one of the country’s largest car sales and service companies. “This is better than nothing, but it misses a lot of important market opportunities,” he told Al Jazeera. Khosravani explained that the move could have a positive psychological effect on average consumers who may not necessarily want to buy, but would welcome the re-entry of newer models into the market. Imports, he said, could signal an opportunity to improve the market for midsize cars, but low price caps and other restrictions set out in government statute “put the final nail in that coffin.” “This statute was not written for the private sector, it was written so that some of the same companies that previously had contracts with foreign brands and imported cars can do so again,” Khosravani said, pointing to another government condition forcing importers to obtain direct import licenses from foreign manufacturers. Additionally, the government has yet to specify import duties or customs duties – which are expected to be determined after the cars are imported. Khosravani said more affordable prices in the Iranian car market will largely depend on whether the nuclear deal is reinstated, which will have a big impact on exchange rates and diversity in the market. “I would open imports to everyone so that all natural and legal persons can import cars,” he said of his own proposed model. It also proposed initial duty levels at 50%, which will be reduced for CKD and Semi-Knocked Down (SKD) imports and a move away from government currency, incentivizing average consumers to invest and also sell their unused vehicles purchased as store of value. “When talking about car imports, some people associate it with issues like class differences and inequality, saying that cars are only a concern of the rich. But that is not true, cars are everyone’s concern and if prices come down, everyone will benefit,” Khosravani said.
title: “Why Iran Is Ending A Years Long Ban On Car Imports News From The Automotive Industry Klmat” ShowToc: true date: “2022-11-25” author: “Tammi Laditka”
Last week, President Ebrahim Raisi’s cabinet finally approved a regulation to import foreign-made road vehicles, more than four months after his government initially gave the import a green light. Raisi’s predecessor, President Hassan Rouhani, had in July 2018 formally banned cars imported in Completely Built Unit (CBU) format, allowing only the Completely Knocked-Down (CKD) format where cars are imported in parts, not assembled unit. The decision was a reaction to a unilateral withdrawal by the United States from the country’s 2015 nuclear deal with world powers months earlier, which was followed by waves of comprehensive economic sanctions that also triggered a currency crisis. As major Western partners withdrew from the Iranian market, the move also left the door open for CKD imports of a variety of Chinese vehicles, which have since flooded the market. However, a large share of the market remains under the control of a small handful of local automakers. chief among them state-owned Iran Khodro, which has been responsible for manufacturing inferior quality cars that are also becoming increasingly unaffordable due to the currency crisis and the rampant inflation that followed it. Police authorities and experts have also blamed some of the local cars for the extremely high fatality rates in the country – especially the old models that still prevail, such as SAIPA’s decommissioned Pride, which became infamous as the ‘death chariot’ » due to his presence in accidents. Many of the Chinese cars imported with CKD are also out of reach for the average Iranian as they reach the hands of consumers at exorbitant prices – often more than double the actual prices – due to high import duties, ostensibly for protection and incentives in local production.
No “luxury” import.
In this environment, some hoped that the regulation on new imports would signal a policy about face, opening the market to large numbers of higher quality vehicles. But with Washington’s sanctions still squeezing Iran’s foreign currency income streams and affordability remaining a major issue, the government has devised regulations it said are aimed at avoiding “luxury” imports. First, the statute approved by the ministerial law stipulates that only 1 billion euros ($1 billion) will be allocated for imports through the Central Bank of Iran, and all imported cars must have a maximum value of 20,000 euros, with cars worth less than 10,000 euros is given the highest priority for the benefit of the average consumer. This automatically excludes many popular models from leading global brands and means that a maximum of 100,000 cars will be imported into Iran. Only hybrid or pure electric cars can be imported into special commercial or industrial zones, with importers tasked with investing in and setting up charging stations, according to the government. The government regulation also states that local manufacturers will be incentivized to include imports of technology and parts to improve their own practices. A worker inspects the body of a car at the Iran Khodro car manufacturing plant just outside Tehran, Iran [File: Vahid Salemi/AP Photo]
The nuclear deal factor
The first vehicles are expected to enter the country within months, ahead of the launch of Iran’s current calendar year in March 2023. Government officials said negotiations had been held with Western companies, in addition to those in China and India, without elaborating. The government regulation also leaves the door open to foreign investment, saying sedan cars can be imported through foreign investment, but only if they are to be used in public transport. However, despite its potential, investors are hardly lining up to set up shop in the Iranian market as it will be susceptible to secondary US sanctions. Iran and the US have been negotiating indirectly since April 2021 to restore the 2015 nuclear deal. If they reach an agreement, most sanctions on Iran would be lifted in exchange for reinstating restrictions on the country’s advanced nuclear program. But even if the nuclear deal is reinstated, Iranian officials have warned in recent years that former partners who abandoned their commitments to the Iranian market because of US sanctions will not find it easy to return. The sentiment is only reinforced by the growing focus on a doctrine of “resistance economy” defined by Supreme Leader Ali Hosseini Khamenei, which emphasizes local production and self-reliance.
“Not for the private sector”
Although the opening of imports is a positive development, the government’s conditions for importing new cars are very strict and limited, according to Ali Khosravani, who owns one of the country’s largest car sales and service companies. “This is better than nothing, but it misses a lot of important market opportunities,” he told Al Jazeera. Khosravani explained that the move could have a positive psychological effect on average consumers who may not necessarily want to buy, but would welcome the re-entry of newer models into the market. Imports, he said, could signal an opportunity to improve the market for midsize cars, but low price caps and other restrictions set out in government statute “put the final nail in that coffin.” “This statute was not written for the private sector, it was written so that some of the same companies that previously had contracts with foreign brands and imported cars can do so again,” Khosravani said, pointing to another government condition forcing importers to obtain direct import licenses from foreign manufacturers. Additionally, the government has yet to specify import duties or customs duties – which are expected to be determined after the cars are imported. Khosravani said more affordable prices in the Iranian car market will largely depend on whether the nuclear deal is reinstated, which will have a big impact on exchange rates and diversity in the market. “I would open imports to everyone so that all natural and legal persons can import cars,” he said of his own proposed model. It also proposed initial duty levels at 50%, which will be reduced for CKD and Semi-Knocked Down (SKD) imports and a move away from government currency, incentivizing average consumers to invest and also sell their unused vehicles purchased as store of value. “When talking about car imports, some people associate it with issues like class differences and inequality, saying that cars are only a concern of the rich. But that is not true, cars are everyone’s concern and if prices come down, everyone will benefit,” Khosravani said.
