Iran's Q1 Automotive Imports Bill Nearly Reach $1 Billion

EghtesadOnline: Iran's automotive import bill for the first quarter of the current fiscal which started on March 21 has been published, with the total value of the imported parts standing at $779 million and 7,043 cars worth $198.9 million entering Iran.

News ID: ۷۸۳۲۳۰

11 July 2018

According to statistics released by the Islamic Republic of Iran Customs Administration, in terms of value, auto parts have a 6.93% share of all commodities entering the country, topping Iran's import bill.

The auto parts imports during the three-month period came to $779 million against $447 million a year earlier, indicating a 73% year-on-year rise.

Following auto parts are corn feed ($435 million), semi-milled or wholly milled rice ($374 million) and soybean ($372 million) as the goods making up the major imports of the country. The total value of all imports in the first quarter stands at $11.2 billion, according to Financial Tribune.

>Categories

Auto parts shipments are categorized into three groups depending on the share of locally manufactured parts in the final product: vehicles with under 30% localization, 30-50% and over 50%.

The first group (with less than 30% localization) has the biggest share in Iran's auto parts import bill, with $541 million and 69.5% of parts brought into the country, indicating an outstanding 115.3% jump compared to the first quarter of the previous fiscal.

Imports of the parts falling in the second category (30-50% localization) have observed a 70.3% year-on-year hike in terms of value, costing $115 million and accounting for 14.8% of the auto parts bill.

The third group (with localization over 50%), with the total value of $122 million accounts for 15.7% of parts entering Iran, registering a 4.9% YoY decline.

>Car Imports

IRICA's data shows during the first three months of the current fiscal, 7,043 vehicles have been imported into the country, with their value standing at $198.9 million.

The figure reveals a staggering decline compared to the year before both in terms of number and value. Car imports have dropped 67.56% in terms of number, and 66.75% in terms of value compared to the same period of time a year earlier.

In other words, the first three months of the previous year saw the import of 21,714 vehicles worth $598 million.

Following US President Donald Trump's withdrawal from the historic 2015 Iran nuclear deal, which heralds reimposition of far-reaching economic sanctions, the country has resolved to cut imports to save the shrinking hard currency reserves from exhaustion.

During recent months, the dollar exchange rate hit unprecedented highs, creating economic uncertainty and prompting the government of President Hassan Rouhani to prioritize the needs of the public by banning the import of non-essential goods.

The government has introduced a ban on the import of 1,339 commodities categorized as "non-essential goods with domestic equivalents," which has been in force as of June 22 to save the country's dwindling foreign currency reserves from depletion.

One of the items included on the list of non-essential goods is vehicles, whose inclusion has been questioned repeatedly by the public and the media as car imports accounted for less than 8% or $4.04 billion of Iran's overall imports in the last fiscal (March 2017-18).