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Iran begins importing foreign cars after 5-year ban

 Tahran - After a 5-year ban, Iranian ports received the first shipment of foreign vehicles consisting of 22 vehicles produced by South Korean company KIA, with future cargo including specific Japanese and Chinese vehicle models.

Imported cars were not new on Iranian streets, after production lines in national factories produced hundreds of thousands of them and imported similar quantities, even before the return of sanctions on Tehran, following the previous U.S. administration's withdrawal from the nuclear deal in 2018.

With the return of Western sanctions on Iran, several European automobile companies have left, including Peugeot, Citroën, Renault, French, Volvo, Mercedes Benz, German Mercedes-Benz and Brennan Leheni Kia) South Korea; This led Tehran to ban the import of foreign cars in May 2018 to curb the exit of hard currency.

Iran begins importing foreign cars after 5-year ban

Breaking the car import blockade:

The ban on car imports - in addition to the departure of foreign companies - has led to the Iranian citizen's demand for the acquisition of domestic cars, causing a sharp shortage of supply, which prompted the government of President Ibrahim El-Kadeel last May to lift the ban on the import of cars, as part of the "adjustment of markets and competitiveness of the automotive industry" in the country.

The issue of automobile imports has caused considerable controversy in the Iranian community for months, owing to years-old policies on exchange rate and financial exchanges, but the problem of accumulated demand in the domestic auto market has urged Iran's conservative parliament to legislate a law obliging Iran's central to provide 1 billion euros for this purpose.

After the first shipment of imported vehicles arrived in Iranian territory, at dawn last Sunday, the conservative pro-government media celebrated breaking the siege of foreign car imports, drawing widespread criticism from the correctional media that recalled the previous government's achievement in annexing a number of Airbus aircraft to Iranian airlines after 38 years of embargo.

Under the heading "Mountain fold mouse", the "Editorial" Institute of Economic Studies wrote that importing 22 vehicles does not depend on the thirst of the market and that it is expected that car prices will continue to rise in the coming period.

Sedation Timer:

Whether the import of cars will achieve the desired goals of the resolution, economic researcher Mohammed Ja 'afari says that what has been imported is only a symbolic process that has been received by car prices higher, attributing to the rise in the price of the US dollar over the past period.

Speaking to Al Jazeera Net, Ja 'afari ruled out that imported cars would modify or develop the quality of domestic cars due to the granting of the lion's share of the foreign vehicle import sector to Iran Khudro and Saiba, Iran's two largest automobile manufacturers.

According to the Iranian researcher, the decision to import foreign cars is temporary, and may cease after the disbursement of 1 billion euros allocated for this purpose.

According to a spokesman for Iran's Ministry of Industry and Trade, Amid Qalibaf, 100 thousand vehicles are scheduled to be imported until mid-March, such a quantity during the first three months of next year (beginning on March 21).

As negotiations to salvage the nuclear deal have stalled, Iran's approval of imports of foreign cars will not include Western models, particularly American, German and French, for political reasons.

Brokers' Profit:

While Iran's Ministry of Industry and Trade announced that it would adopt supply and demand on the exchange for the pricing of imported vehicles, it remained silent on how to pay its value under the ban on its financial transactions, opening up speculation about dealing with a third party or buying it from frozen Iranian assets abroad.

Meanwhile, the newspaper "Dnyai Eesel" revealed that the Central Bank has not paid a single dollar for the import of foreign vehicles despite its pledge to provide 1 billion euros, quoting a spokesman of Iran's Ministry of Industry and Commerce as saying that requests will be made to foreign companies to manufacture the required quantity after being sold in advance on the Tehran Stock Exchange.

Dawood (owner of an auto show in the Ghiori neighbourhood south of the capital Tehran) considers that the mechanism of displaying limited numbers of imported cars on the exchange will take them out of the purchasing power of a very large segment of Iranian citizens, given the high demand of brokers and auto exhibitions.

The Iranian merchant told Al Jazeera Net that except for the segment of the wealthy - which does not exceed 20% of Iranian society - the average citizen has been unable for years to acquire even Chinese cars assembled indoors, as well as that they cannot be compared in quality with South Korean or Japanese cars.

He concluded that the import decision would positively reflect the activity of brokers who would buy numbers of imported vehicles and bet on selling them at high prices over the next few months, given the country's high inflation.


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