TEHRAN: While the online auto import registration system was restored a week ago and the Trade Promotion Organization is of the opinion that car prices will decline, the Head of Iran Auto Importers Association believes otherwise. In a phone interview with Financial Tribune, Farhad Ehteshamzad said, “The new import tariffs have indeed heightened the already existent chaos in the [foreign car] market. While authorities claim that imported car prices will decline, prices are rising.” He says his association is lobbing through all possible channels “in the hope that the new import rules will be revised.” The government passed an amended version of auto import rules on Dec. 30, according to which, depending on engine capacity, import tariffs on gasoline-fueled vehicles have increased 15-40%. Currently, auto import tariffs are between 55-95% among the highest in the world.
While most governments are offering incentives to promote use of and create interest in hybrids, the customs duty in Iran for hybrid gasoline-electric cars has also increased significantly from 4% to 45-65% depending on the vehicles gasoline engine capacity.
Ehteshamzad says “the import tariff hike is, among other things, aimed at plugging the holes in the government budget.” Without playing with words, he says, “The people always pay, and will continue to pay, for the government’s heedless actions. Increase in tariffs translates into one thing: customers need to dig deeper in their pockets to get a decent ride.” An official at the TPO, Ali Aliabadi Farahani, was quoted at the weekend by ISNA as saying, “The organization expects imported car prices to decline because the amended import rules have been announced and TPO’s online registration website is up and running.” “Before the new rules were introduced, rumors had it that the government would increase auto import tariffs up to 100%. The new tariffs are lower than what was speculated. Therefore, the prices should come down.” Since introduction of the new import regulations, almost every market observer and industry analyst has written that the prices will continue to climb.
