55% decline in car imports

Cars imported into Iran more than halved during the first seven months of the current fiscal year (started March 21), the latest statistics released by Iran’s Customs Administration showed.

During this period, 23,786 passenger vehicles worth $576,400,000 were imported, which figure for the same period of the previous year was 55,000 units and indicates a 55% decrease.

According to SAMT newspaper, the decline in car imports is influenced by different variables such as the public purchasing power and official decisions.

According to Farhad Ehteshamzad, the head of Iran’s Automobile Importers Association, the decline in car imports is the direct result of lower demand.

During the month ending October 22, Iran Customs Administration announced an 89% decrease in car imports compared to the same period of the year before when 25,624 units were imported. This year, the number stood at 2,907 units.

According to the official, the post-auto loan market’s reaction has reinforced the idea that “No to local car” campaign and stifling regulations did not have a serious impact on the market and the only factor that affected the market was demand.

Domestic buyers are waiting for better car prices and payment plans.

Ehteshamzad announced that due to this very fact, several independent importers are no longer working in the auto sector.

“Without demand, the independent importers lost interest in the market,” he said.

On the other hand, official importers are introducing incentives to stimulate the market, such as the sale of cars with long-term installments.
Kourosh Morshed-Solouk, deputy head of IAIA, put forth two major reasons for the decline.

First, he mentioned economic stagnation as the main reason for the sluggish business.

Second, he highlighted the guidelines put forth by the Ministry of Industries, Mining and Trade, which stipulate that unofficial automobile importers will have to provide after-sales services for the cars they bring into the country.

According to Morshed-Solouk, unofficial imports previously accounted for a large part of overall trade in the sector.

“The new regulations effectively cut off most illegal activities in this area and legal unofficial imports also declined,” he said.

During the month ending October 21, a total of 2,589 vehicles were imported and South Korean and Japanese brands registered the highest demand. Of all the cars imported during this period, 724 were Hyundais with the ix55 (Santa Fe), ix35 (Tucson) and i20 emerging as the top bestselling models.

During the first seven months of the current Iranian year, Hyundai, Kia and Toyota each won 40%, 17% and 16% of the market share respectively.
During this period, 3,857 Kias were imported and the company’s Sportage was the most popular model in Iran while Optima, Cerato and Sorento were also in high demand.

Toyota’s bestsellers were RAV4, Corolla and Camry, with the company having imported 3,629 cars to Iran during the seven months. To test the market, a single unit of the full-hybrid electric Prius was also imported. Experts predict that the model will soon be imported in larger numbers.

Other imported models with a lower market share during the same period were Renault (6%), BMW (5%), Chery (4%), SsangYong (3%), Mitsubishi (2%), Mercedes Benz (2%) and MG (2%).

By Financial Tribune