Kerman Motor CEO: Real Competition Can Save Iran’s Automotive Industry

Khodrocar - Saman Firoozi, CEO of **Kerman Motor**, emphasized the need for *genuine competition* as the key to rescuing Iran’s struggling automotive industry. Speaking at the monthly meeting of automotive industry executives in Kerman, he highlighted the company’s commitment to preserving human capital while calling for a fundamental review of current industry policies.

Firoozi criticized the **lack of a clear national strategy** and **the absence of real competition**, describing government indecision as one of the main reasons behind the sector’s stagnation and the dissatisfaction of all stakeholders.

Referring to the **ongoing suspension of vehicle imports**, he explained:

> “In the 1404 (2025) national budget draft, the import tariff for all vehicles has been set at 100 percent, regardless of technology, powertrain type, or vehicle value. If all imports are subject to this flat rate, the final price of imported cars will increase by around 40 percent. This has already triggered disputes among the Parliament, the government, and the Administrative Justice Court, leaving the market paralyzed and all sides harmed.”

The CEO also warned about the **negative effects of price controls**, saying that the Competition Council’s pricing directives, based on the assumption of a fully monopolized market, have pushed many automakers toward bankruptcy:

> “When the state enforces fixed pricing without considering market dynamics, manufacturers are unable to survive. This policy has led to financial instability and job cuts across the industry.”

Firoozi questioned whether such regulations have actually reduced monopoly or improved competition:

> “Compare production statistics of the first half of 1402 (2023) with the first half of 1404 (2025)—you’ll see the real outcome. When the government avoids decision-making and the Ministry of Industry acts passively, various committees and agencies step in, making the process even more complicated.”

He pointed out that **all five main stakeholders**—customers, suppliers, employees, the government, and shareholders—are currently dissatisfied, which, he said, is a serious warning sign.

Addressing the importance of **innovation and technological growth**, Firoozi noted:

> “We have advanced laws supporting knowledge-based production and even tax incentives for innovation, yet we don’t allow manufacturers to earn enough profit to invest in these areas.”

As a **solution**, the Kerman Motor CEO called for **the creation of a level playing field** through rational tariff structures and deregulation:

> “If vehicle imports are allowed with a reasonable base tariff of around 35–40 percent, and auto parts with 25–30 percent, we can establish parity between domestic and international business environments. Additionally, allocating 25–30 percent of the total foreign currency quota of the automotive industry for imports would significantly support its development.”

Firoozi concluded by urging the government and the Ministry of Industry to **treat all manufacturers equally** regarding product standards and other requirements while eliminating restrictive policies such as price fixing:

> “If we move toward fair competition, all stakeholders will benefit and the industry will thrive. Otherwise, we risk chronic imbalances and recurring bankruptcies, just like in the energy and water sectors.”