The Filtering of car importation

Khodrocar - With the announcement of the Ministry of Industry, Mining and Trade, the import of French cars to Iran was banned. Although the Ministry of Security says that the ban on the import of French-made cars is due to the behavior of Peugeot and Renault during the embargo, however, it seems that this embargo has political roots and is related to the recent positions of the government of this country regarding the protests in Iran.

The government responded to the actions of the French government regarding the recent stances on the protests in Iran by banning the import of cars from this country. The Ministry of Industry, Mines and Trade had previously promised that the import of cars is not limited to a few countries, especially China, but now it has been reported that the Ministry has banned the entry of French cars, an issue that could make the road more open and smooth for the Chinese. Now, this question has arisen in the minds of the public, what is the secret of the sudden ban on the import of French cars? Is it just a matter of settling the account regarding the behavior of French car manufacturers during the sanctions period, or have the recent political events caused them to filter in the field of car imports to Iran?

As the spokesperson of the Ministry of Industry announced, the government of Iran has sanctioned French car manufacturers for their behavior (after violating the JCPOA) and will not allow them to put pressure on Iran's car industry and market with sanctions. According to Omid Qalibaf, due to the unprofessional behavior of the French in the past years, the Ministry of Security no longer allows the registration and import of products from Renault, Peugeot, Citroen and other French car manufacturers. He also said that no permit has been issued for the import of French cars in the past and the focus for import is only on non-French Japanese, Korean, Chinese and European cars.

The ban on the import of French cars contains several important points and issues, one of the most important of which is the smoothing of the entry path of Chinese cars. In about three and a half months, it will be one year since the president issued the decree canceling the ban on car imports; However, the final assignment of this story is still not clear, and the Ministry of Privacy adds new details to it from time to time.

It was March of last year that Ebrahim Raisi issued an eight-point decree during his visit to Iran Khodro, and in one of its clauses, the Ministry of Industry was required to prepare preparations for the resumption of car imports. In June 2017, after the violation of the JCPOA by the United States, the government banned the import of many goods, including cars, with the approval of the Economic Coordination Council of the Heads of Power and in line with the management of foreign exchange resources, a ban that lasted for four years. With the ban on car imports and the growth of inflationary expectations and the rise of currency prices, the country's foreign car market faced a price explosion and its vibration shook the domestic market as well.

After issuing the order to free the entry of cars, some experts and activists in the field of import stated that this event can firstly lead to a decrease in the price of foreign cars in the country and even reduce the price curve of domestic cars. Some even mentioned the possibility of a 50% drop in the price of foreign cars. Although after the order to liberalize car imports, the price in the foreign car market took a downward trend, but in the future, for various reasons, hopes for the resumption of free and competitive imports became less and less. To the extent that many believe that resuming the entry of cars into the country cannot give a special price shock to the market and lead domestic car manufacturers to improve quality and reduce prices. What first planted the seeds of disappointment in the matter of car import was the strict, restrictive and vague regulations that the Ministry of Industry announced in early September.

According to this regulation, firstly, the import of cars depends on the transfer of technology, secondly, a price ceiling of 20 thousand dollars is considered for cars, and thirdly, the profit of importers is also determined by order. On the other hand, importers are required to offer cars in the commodity exchange, and the new tariff will be included in a floating manner. In addition to these, car manufacturers were also allowed to import cars, and it was here that the hopes of creating competition in the car market and improving the quality and controlling the prices of domestic cars were somehow lost.

It was because of these issues and limitations that some old importers stopped importing and withdrew. A little later, the Ministry of Industry announced the names of the companies allowed to import and also included the names of major car manufacturers and members of the private sector in the relevant list. This was despite the fact that only two importing companies are among the authorized ones, and this means that the import control will be in the hands of car manufacturers. This was the second blow to the hopes of citizens for competitive imports and affecting the car price curve in the market, which disappointed the public opinion.

Now, with the announcement of the ban on the import of French cars, it is clear that the import has become a reaction against some embargoing countries, a reaction which, of course, seems to be more related to the recent events (the meeting of the French president with some opposition figures). This decision of the government is apparently a reaction to the French car manufacturers leaving Iran after the country's embargo, but it seems that the recent behavior of the French government has caused the Iranian government to ban the import of cars from this country. French car manufacturers were the first car companies that sat down at the negotiating table with Iranians during the JCPOA and signed a joint cooperation agreement.

Based on this, Peugeot entered into a joint cooperation with Iran Khodro, Renault signed a contract with the Organization for the Development and Modernization of Iranian Industries and the private sector to operate independently in the country, and Citroen bought half of Saipai Kashan's shares.

However, the excitement of the French subsided after the announcement of America's withdrawal from the JCPOA in May 2017 and the subsequent embargo on the country's automobile industry, and they packed their bags and left Iran in order to be safe from America's material and moral crimes. In these four years since the exit of the French car manufacturers, the responsible authorities (from the governments to the representatives of the Islamic Council) have repeatedly promised to take revenge on Peugeot and Renault and have emphasized that they will not allow them to enter the country's market. This promise has now been fulfilled in response to another incident and the French have been removed from the league of car imports to Iran.

This is despite the fact that Renault and Peugeot had the conditions to export their products to the country's market more than any other foreign car manufacturer. The main condition for car import is the transfer of technology to the country, a condition that French car manufacturers have because of their years of activity in the Iranian car industry. On the other hand, in the field of after-sales service, as another important condition of the government for importing cars, the French still have the necessary conditions. Despite all this, the Ministry of Industry, by politicizing the matter, has turned a blind eye to these benefits and is happy to import cars from other countries, especially China, South Korea and Japan.

Of course, the issue is not only the French and the likes of Renault and Peugeot, but the main issue is the constraints and restrictions that the Ministry of Industry has included in the matter of resuming car imports. Apparently, the goal of the government and the Ministry of Industry in lifting the ban on car imports is to regulate the market and create competition and lay the groundwork for the transfer of technology to the country, however, despite the restrictions and restrictions in the regulations and the politicization of the matter, the realization of these goals seems unlikely.

The nightly boycott of French cars has created several questions and ambiguities that require a convincing answer from the government and the Ministry of Industry.

The first question is that if the government and the Ministry of Industry have removed the French from the list of potential car imports due to sanctions, then why are the Chinese, Koreans and other European countries still on this list? China, Korea and other European countries have not participated in the sanctions against Iran, so why are only the French banned? Right now, despite all the consultations, South Korea is not willing to release Iran's blocked funds and is eyeing the issuance of a license by the United States. So how is it that the Ministry of Industry takes revenge on the French but turns a blind eye to the behavior of the Ishmadamis? The problem is not that the government and the Ministry of Industry should sanction all the embargoers, but by the way, the question is why should there be filtering for the import of cars with the aim of regulating the market and creating competition and transfer of technology and allowing the entry of cars from a certain country and importing from Banned that one?

Another question is why the government and the Ministry of Industry have suddenly thought of banning the import of French cars? Although there have been many talks about punishing French car manufacturers during the embargo period, first of all, it is mostly related to joint activities in the field of production, and secondly, in about 9 months when the issue of imports has become hot, the policymaker has never said anything about filtering countries and car manufacturers, except for the recent case. In this story, he did not. On the other hand, after announcing the import regulations, the country's automotive managers announced that the entry of French cars into the country, including Renault and Citroen, is on the agenda. It should not be forgotten that the import of complete cars to Iran has never been banned.

These cases show that there was no intention to ban the import of French cars from the beginning, and most likely the political events that happened recently are the main reason for this incident. In other words, it seems that the sudden ban on the import of French cars has a political factor and is not unrelated to the recent positions and behaviors of the French government, especially Emmanuel Macron, the president of this country, in response to the protests in Iran. If this is the case, which is likely to be the case, we should expect a ban on the import of cars from other countries as well, including Germany, considering its recent positions regarding the protests in Iran.

Banning the import of French cars to the country, while losing some benefits, will not be without consequences. Before the announcement of this ban, various models of French cars were on the list of candidates for import to the country, and Iran Khodro, Saipa and Pars Khodro could fill most of their import list with French cars. The Ministry of Industry even gave an import license to Saipa-Citroen as an independent company in partnership with Citroen, and it was believed that this carmaker would import models from the French company. Now, this possibility has disappeared for the country's major car manufacturers, even though they have the necessary infrastructure for technology transfer (at least on paper) and after-sales services.

Although the Ministry of Industry says that it focuses on importing cars from China, Korea, Japan and non-French European countries; However, it seems that removing the French from the list of cars that can be imported into the country will actually benefit the Chinese the most. It is even possible that the Ministry of Industry will issue a license to import Russian cars due to good political relations with this country (such as China).