The Law on Car Imports to Iran Will Change

With the change in the law regarding car imports in Iran, vehicles over 2500 cc will also be allowed entry into Iran. According to the new regulations, only official representatives of foreign car manufacturers will be able to register orders and import vehicles, completely eliminating the possibility of imports by non-representatives. On the other hand, all vehicles priced above $30,000 will be subject to increased import duties. The ban on importing luxury cars with engine sizes over 2500 cc into Iran will also be lifted. With this change, after several years of prohibition, the possibility of importing super sports and very luxury cars like Porsche and Maserati to Iran will be reinstated. The import duties for imported vehicles will be paid according to the new guidelines, proportional to the value of the vehicle. Accordingly, vehicles priced between $30,000 and $40,000 will incur a 30% duty, those between $40,000 and $50,000 will incur a 50% duty, vehicles priced between $50,000 and $60,000 will incur a 75% duty, and those priced above $60,000 will incur a 100% duty for imports. Under the new import regulations, electric and hybrid vehicles will be exempt from duties. Currently, over 7,000 vehicles without order registration approval are stuck in Iranian customs, and after the new import guidelines are issued and implemented, the owners of these vehicles, whose main reason for not being cleared is the lack of vehicle registration documents, will be able to obtain a vehicle registration document from the Ministry of Industry, Mine and Trade and also sign a formal contract with official representatives to clear their imported vehicles. In 2016, due to costs such as shipping, tariffs, and various taxes, each imported vehicle was sold in Iran at 70% higher than the global market price; however, this figure may have been even higher due to the various profits of importing companies or market brokers. It may seem strange, but in the streets of Tehran and some other cities in Iran like Tabriz, one can see more luxury cars than in many cities in Europe, cars that are priced more than twice the global price. In some cases, these prices are alarmingly several times higher than their prices in global markets. For example, in 2016, the Mercedes S 500 was traded in the Iranian market for 2 billion and 800 million tomans, or the BMW M6 was priced at over 2 billion tomans. Many experts believe that the increase in 'intermediary wealthy individuals' in Iran is one of the factors driving the strong desire to purchase luxury cars in the current tough economic conditions; while 'productive wealthy individuals' are under pressure, 'intermediary wealthy individuals' are in a good situation and spend their money on luxury cars, which themselves have an investment nature and may even increase in price over time despite usage. It seems that with the changes in the laws regarding car imports, the Iranian car market will undergo a fundamental transformation in the upper segment. Currently, the market for cars under 100 million tomans is mostly in the hands of domestic manufacturers, while the market above 100 million tomans is mostly in the hands of car importers. In 2016, three cars, the Kia Cerato, Renault Fluence, and Toyota Corolla, accounted for the highest sales in the imported car sector. Statistics from Iranian customs show that in the 12 months of 2016, over 62,000 passenger cars worth over 1 billion and 500 million dollars were imported into Iran. According to customs information, the import of motor vehicles with cylinder capacities of 1500 to 2000 cc was valued at 893 million dollars, ranking third, followed by parts for passenger car production valued at 782 million dollars.