Rouhani Gives Industry Minister 15-Day Deadline to Identify Violators of Car Imports or Distribution

On Sunday, July 1, Iranian President Hassan Rouhani ordered the Minister of Industry, Mine and Trade to investigate the import of foreign cars and the distribution of vehicles by domestic manufacturers within 15 days and to explicitly report any violations to the public and the judiciary. This directive follows reports of the registration and importation of over 6,400 vehicles through 'illegal channels' and public dissatisfaction regarding the distribution and pricing of domestic automotive products. Nasser Seraaj, head of Iran's General Inspection Organization, stated on June 17 that the car ordering website had been hacked, resulting in the illegal import of approximately 5,000 high-end and expensive cars into the country. According to Seraaj, 'about 4,000 of these cars have been cleared and entered the market, while 1,000 cars remain in customs.' On July 8, he also reported that 'the hacker has been arrested' and 'provided the code used to gain access.' Meanwhile, the Ministry of Industry's security center announced that operations to clear about 4,500 of the 6,000 illegally registered vehicles in customs had been halted, and cases had been opened for over 1,900 vehicles. From July to December 2017, new vehicle registrations were halted, but after that, government officials and parliament members announced that several vehicles had been illegally registered and imported during that time. The president's directive was issued while Minister Mohammad Shariatmadari, despite Rouhani's verbal order, had refrained from publishing a list of recipients of government currency, claiming that such action would be 'a war against the private sector.' However, after media pressure, Shariatmadari retreated from his position on Saturday and requested the Central Bank to publish this list. The Central Bank of Iran also released a list on Sunday of companies that imported goods with the 4,200 Toman exchange rate; however, the names of car importers, spare parts, and several home appliance importers were missing from this list. Following the U.S. exit from the JCPOA, the Iranian car market, like some other markets, experienced severe fluctuations, with some Iranian news agencies reporting that the difference between the prices announced by car manufacturers and market prices was tens of millions of Toman. For instance, ISNA reported on June 19 that the factory price of the Mazda 3 Type 3 was 131 million Toman, while its market price was 200 million Toman. According to this news agency, the Peugeot 2008 is offered at a factory price of 115 million Toman but has reached a market price of 193 million Toman. Meanwhile, MP Nader Qazipour claimed that 60,000 cars were 'hoarded' by Saipa and 30,000 cars by Iran Khodro. Following these market fluctuations, major car companies implemented online sales plans for some of their vehicles. Some experts and news agencies have attributed reports of foreign car manufacturers exiting joint projects with Iranian manufacturers as a reason for the sudden price increase of 'participatory cars.' After the U.S. withdrawal from the JCPOA, the French company PSA, which produces Peugeot and Citroën vehicles, decided to exit Iran. Renault, its competitor, which sold 160,000 vehicles to Iran last year, has stated that it is trying to remain in the Iranian market. MP Vali Maleki also reported on June 11 that Japanese Mazda and South Korean Hyundai had canceled their contracts with Iranian manufacturers. Additionally, experts noted that the government's recent ban on the import of foreign cars has led to increased car prices. Farhad Ehteshamzadeh, head of the Car Importers Association, stated that 'this decision will have negative effects on both domestic and foreign car markets.'