Necessity of Removing the Imported Car Supply System: Imported Cars Hidden in Secret Parking Lots

In an interview with EghtesadOnline, an industry and market expert discussed the disorderly nature of the current vehicle import process and the challenges it poses for consumers.

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03 December 2024

Babak Sadrayi, an automotive industry and market expert, spoke about the state of vehicle imports and their distribution to EghtesadOnline reporters: "Since the liberalization of car imports, around 40,000 cars have entered the country. However, it's strange that these cars are neither seen on the streets nor in showrooms, as it seems that dealers, anticipating price increases, have stored the imported cars in hidden parking lots."

He added, "Political developments, which might influence the price of the dollar and even car imports, have created the temptation for individuals to hold onto cars, hoping their prices will rise."

Sadrayi continued: "This round of car imports is chaotic and unorganized. Sometimes, more than 15 companies have been involved in importing a single brand, such as Toyota, none of which have experience in car imports, after-sales services, or automotive company operations. With this situation, customers will definitely face many difficulties in the future. Many experts have warned the Ministry of Industry that this import process is not the right one."

According to Sadrayi, the issue of foreign currency allocation for car imports, the process itself, and the shortage of cars have led to the rapid growth of car import companies, each importing only a limited number of vehicles. This situation disrupts the distribution system, after-sales services, and erodes consumer trust.

He further commented, "Another issue is determining why these cars are not reaching consumers. With 40,000 vehicles imported, there should be a noticeable number of them on the roads in upscale areas of Tehran, which is not the case. It seems that import statistics show one thing, while supply statistics show something entirely different, which is puzzling."

The automotive industry expert stressed, "It appears there is a hidden story behind the supply system of imported cars, and the import process from the government’s side remains unresolved. We need to see where this process will go in the future, depending on the country's macro-political conditions and global developments. Whether sanctions are lifted or intensified will also affect the import process."

Sadrayi stated, "While the government and particularly Parliament insist on importing cars in larger quantities to influence the market, I believe this issue, like many others in our country, is stuck in a tight knot—one that could be untangled, but it seems invisible forces are tightening it."

He noted, "Despite the import of new cars, even the prices of imported cars from 2018 or earlier have not changed significantly. They are still well-received by buyers due to their extra features and the fact that they are not made in China."

Sadrayi emphasized, "Car imports are still abnormal and have not become a regular process. I hope that political and economic issues don't hinder imports, and that supply is better organized. At least 40,000 to 50,000 cars should be supplied annually, and the system should be abolished. The system is doing the same thing to imported companies that it did to domestic car manufacturers. It should gradually be eliminated, and companies should be allowed to compete in the market. The consumer should determine the price based on the quality of the product and the services they receive."

He added, "Every time a new system is introduced, the car supply happens in trickles, creating a market where investors and dealers are encouraged to buy the product."

He further explained, "While the car price bubble has decreased, the price listed in the system and the market still differ. Only proper supply can somewhat deflate this bubble."

Sadrayi explained: "When people buy imported cars through the system, they see that the car is priced at 2.5 billion tomans in the system, while it costs 3.2 billion tomans in the market. This entices them not to put the car into circulation and instead keep it in storage, because they know that the exchange rate may rise, sanctions might intensify, and car imports could face difficulties, allowing them to sell the car at a higher price. This is a repetitive experience from the past. People remember that in the last year of car imports, as soon as sanctions began and the dollar price surged, imported cars were stockpiled in warehouses and sold at prices four times their original value, yielding enormous profits."

Sadrayi concluded: "Before the ban on car imports, 60,000 to 70,000 cars were imported annually, covering 80 to 90 percent of demand, and there was no price difference between the company and the market. The situation we now face regarding imported cars has never been seen at any time in the past."