March 25, 2022
President Raisi has ordered the launch of at least one domestically designed budget car as part of his desire to modernize Iran’s clunky car manufacturing industry.
Raisi issued the order March 2 after he visited the country’s largest automotive company, Iran Khodro, and stood in a huge lot packed with unsold cars.
The president issued eight orders, including the need for more investment and technology transfer from Iran’s defense, space and high-tech industries to boost the quality of cars manufactured in the country. He said nothing about dealings with foreign firms, the source of most Iranian technology for the last half-century.
Raisi also decreed that if Iranian car firms couldn’t get the cars clogging their lots out to the public within three months, then imports of foreign models would be allowed.
But it was Supreme Leader Ali Khamenehi who put a halt to most car imports four years ago in March 2018 at the request of Iranian carmakers, who couldn’t stand the competition even with a hefty import duty. Khamenehi’s views may have changed, however, as the Financial Tribune reported three days after Raisi spoke that the Majlis Budget Committee had approved the import of 70,000 cars in the coming Persian year with import duties of 40 percent to 75 percent (based on engine size). The Financial Tribune said the budget projected these imports would produce state income totaling 600 trillion rials, which would amount to $46,000 per car.
Raisi’s directives included a target for boosting domestic car output in Iran by 50 percent in the Persian year beginning three weeks after he spoke.
Raisi also ordered the discontinuation of at least three old car models over the same period and he insisted Iranian carmakers should replace them with three new models to respond to the demand in the market for reliable cars. He didn’t say how Iranian firms were to do in 13 months what international carmakers spend an average of 72 months doing. That’s 5-1/2 times as long as Raisi’s deadline.
Raisi’s orders to the car industry are meant to allay a growing discontent about the quality of cars inside Iran. Raisi’s interest comes just weeks after police said that airbags on all of nearly 60 cars involved in a chain accident in southwestern Iran had failed to deploy.
The incident, which killed five and injured 41 people, sparked criticism from Supreme Leader Ali Khamenehi, who said in a speech January 30 that domestic car models were of poor quality. But he did not suggest importing cars to provide competition for the domestic industry.
