Chinese, Winners of Iran Car Market Again

Khodrocar – Chinese automakers gain a good share of Iran’s market during the recent years because of some problems in local auto industry. Lack of product variety, the high price of modern joint venture cars such as 2008 that are more than 120 billion IRRs and importation tariff increment, which increased the imported vehicle price are the main reasons for Chinese car's popularity in Iran’s market.

But what is the Chinese vehicles’ place and how far they want to go on Iran’s market during the new year?

"Chinese companies had good sales in Iran because of high importation tariffs during the past 2 or 3 years but their condition is like a bubble. If the ministry of Industry, Mine and Trade put CBU tariffs for Chinese cars with less than 40 percent localization then they will lose their market share instantly.” Farbod Zave, an auto industry expert told Khodrocar reporter.

"It’s near impossible for Ministry to put the difference tariff of CBU and CKD for Chinese automakers because cars with less than 20 percent localization won’t get permission for mass production. However, last year, numerous of cars produced with less 20 percent localization and it was like importing a car entirely.” Farbod Zave added. "Because of high tariffs and other problems, most buyers don’t have other choices except buy Chinese cars. However, high tariffs will affect their market and they have to update their sale conditions. After all, the market condition is really good for Chinese companies and they would have a good year.”

Zave also talked about the poor performance of automakers for localization and said: "localization is not economical because the production rate is not high enough and even with a high rate of production high percent of localization is not economical because those parts and products cannot be exported. In my opinion increasing CBU tariffs will reduce production incentive meanwhile competitive atmosphere will increase the production. The ministry must replace traditional tariff increment with foreign currency tax and it would improve automotive industry and part manufacturing.”

It seems that the Chinese will continue to have a good share of Iran’s market and Iran’s automotive industry management would help them too. In fact, Chinese companies are developing well during the past 5 years and they are the best sellers in the 500 million to 1 billion IRRs segments.

Khodrocar Joournalist: Mostafa Anisi

Khodrocar Translator: Amin Zamani