New Initiative to Replace Old Taxis With CNG-Hybrids

EghtesadOnline: Automaker Iran Khodro (IKCO) and Iran Taxi Union are jointly pushing an initiative to replace 50,000 dilapidated taxis with CNG-hybrids by the end of the current Iranian year (March 2021).

News ID: ۷۵۰۸۴۷

01 September 2020

The scheme aims to curb the worrying air pollution in Iranian metropolises while reducing gasoline consumption, YJC reported.

Morteza Zameni, the head of Iran Taxi Union, said two IKCO sedan models are used in the scheme, namely Samand EF7 and Peugeot 405, which is underway in four cities: Tehran, Mashhad, Hamedan and Isfahan.

“The whole renewal process takes less than a month. Owners of dilapidated taxis file an application with Iran taxi Union. After identity verification, drivers are required to make a down payment. The invoice and license plate number of the new vehicle is issued, and the applicants are asked to complete their payments based on the price of the selected car model,” he said.

Zameni noted that new cars will be ready for delivery 48 hours after the drivers dispatch their old vehicles to scrapyards.

Announcing that over 2,200 taxi drivers have so far submitted applications, the official said that to help the cabbies, municipalities of the targeted cities will pay them 500 million rials ($2,123) in loans.

“The loan covers over half of the new vehicles’ price. Samand costs 940 million rials [$3,991] and Peugeot 405 is sold for 860 million rials [$3,651]. The scheme was approved by the Cabinet’s Economic Council in early March,” he said.

However, the implementation of the plan was postponed since the government, which is opting for Euro 5 standard cars, banned the issuance of license plate numbers for Euro 4 vehicles from the beginning of the current Iranian year (March 20) due to their low quality and high pollution.

As the two models earmarked for the renewal scheme are Euro 4 vehicles, Iran Taxi Union started negotiations with state authorities to carve out exceptions for the plan.

A brand-new Euro 4 vehicle was way cleaner than a decade-old car, they argued.

“Finally, the Cabinet agreed with the delivery of 5,000 Euro 4 vehicles by October 21; new decisions will be made for the remaining 45,000 vehicles,” Zameni said.

“Iran has some 150,000 dilapidated taxis that are worsening air pollution, which figure constitutes nearly half of the 360,000 vehicles in the taxi fleet.”

The union chief had earlier announced that the number of old cabs will reach 245,000 by 2021, if effective measures are not taken.

Earlier Renovation Attempts

Plans for scrappage and replacement of old taxis have a long history in Iran.

One of the earliest taxi renovation scheme, dubbed “Nosazi”, was announced by the incumbent government in collaboration with local banks and carmakers in 2016. The scheme was in line with efforts to reduce the number of old taxis that add to the deteriorating air pollution in the metropolis.

To become eligible, cabbies were required to register their clunkers on the website Nosazi.org. After enrollment, each driver had to dispatch the old car to the scrapyard.

Applicants were offered 200 million rials ($849) in loans at an interest rate of 16%. The money was to be repaid in 48 monthly installments.

After the loan amount was reduced from the total price of the new vehicle, the driver paid the balance upfront.

Last summer, IKCO and ITU signed a deal to upgrade the capital's aging public transportation fleet, in a push to reduce fuel consumption and combat air pollution in the city.

Accordingly, IKCO agreed to renovate 10,000 cabs operating in taxi fleets over a yearlong period.

IKCO's Sales Manager Alireza Oskouei said at the time that the number of new vehicles earmarked for renovating the fleet can increase, depending on demand and drivers' inclination to participate in the renovation scheme.

Reportedly, the scheme’s executors agreed with local banks to offer low-interest loans to cabbies, in order to speedily implement the plan.

According to Zameni, loans worth 400 million rials ($1,698) were to be offered to drivers of old taxis to encourage them to let go of their dilapidated cars.

However, IKCO’s renovation plan did not make noticeable progress.

Those who engineered the 2016 taxi renovation scheme were censured by taxi drivers. Besides complaining about annoying delays in delivery, many at that time said they could not afford the car prices, despite the loan.

With car prices again soaring to new heights, most drivers again cannot afford to participate in the scheme. There have been reports that the loan amount is to be increased. When that materializes and how far this will help remain to be seen.