Improve or Step Aside: Iran Car Industry Needs Evolution

EghtesadOnline: A deputy road minister has called for cuts in auto import tariffs so that low- and middle-income families would be able to afford safer and better cars.

News ID: ۷۸۰۷۳۹

10 December 2017

Reprimanding “low quality of locally-made vehicles” as the main reason for high traffic deaths in Iran, Davood Keshavarzian says, “Motor vehicles manufactured in Iran are among the least safe in the world,” website of the Ministry of Roads and Urban Development reported.

Iran has one of the highest rates of road accidents in the world. According to Keshavarzian, “With the country accounting for 1.25% of global car mishaps, last year 16,000 people were killed in traffic accidents in Iran.”

Men comprise 75% of the unacceptably high figure and mostly are in the age group 25-40. It has been reported that an estimated 800,000 people are injured in road crashes every year, Financial Tribune reported.

During the first seven months of the current fiscal that ends in March, 10,155 deaths were registered as roadway accidents.

Keshavarzian says, “We are having a hard time reducing road accidents and the losses they incur. We need to improve the quality of our roads and drive cars that are safer.”

He added, “Currently, 20 million cars and 10 million motorcycles ply the roads. Last year, 1.5 million vehicles received number plates -- an 11% year-on-year growth.”

“While Iran accounts for 1% of the global population, 2% of registered motor vehicles in the world are on our roads. There are 1.2 billion vehicles in the world.”

Keshavarzian is not the first to draw attention to the almost permanently clogged roads. The people and environmentalists often challenge policymakers and urban planners in this regard.

Government officials and local automakers, ignoring the monumental health and environmental cost to the people, never stop basking in “Iran’s booming auto industry”. Often rejoicing at the “industrial growth”, they try to never mention that cars manufactured in the country are comparatively of poor quality.

A local firm, Iran Standard and Quality Inspection Company, which conducts monthly automotive quality and safety tests on behalf of the Ministry of Industries, says 20% of locally-made cars are of low and unacceptable quality and barely deserve one star in the company’s five-star ranking system.

Higher Tariffs

Auto import tariffs are determined by the Ministry of Industries. Currently, bringing vehicles into Iran costs over and above 100% of the value of the cars. This has effectively made foreign car prices in Iran amongst the highest in the world.

In recent months the prices of imported cars have been rising on a daily basis and in some cases are up by several thousand dollars.

Unconfirmed sources say the erratic situation is possibly because the Ministry of Industries is planning to further increase auto import tariffs by up to 100%.

The minister, Mohammad Shariatmadari, has been quoted by local media as saying that “auto import rules will change soon.” However, since his appointment three months ago he has not shared any information with the public nor has said what actually his ministry’s action plan is about returning stability to the chaotic imported car market.