{"id":15886,"date":"2018-09-21T13:25:57","date_gmt":"2018-09-21T13:25:57","guid":{"rendered":"http:\/\/qatar-news.org\/qatarnewsEn\/?p=15886"},"modified":"2018-09-21T13:25:57","modified_gmt":"2018-09-21T13:25:57","slug":"irans-domestic-car-market-stalls-as-nuclear-deal-falters","status":"publish","type":"post","link":"https:\/\/qatar-news.org\/qatarnewsEn\/?p=15886","title":{"rendered":"Iran\u2019s domestic car market stalls as nuclear deal falters"},"content":{"rendered":"
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\nTEHRAN, Iran: Across Iran\u2019s capital, rush-hour traffic always grinds to a halt, a sea of boxy Renault four-doors and Peugeot coupes all idling their way through the streets of Tehran.
Soon, however, Iran\u2019s faltering nuclear deal with world powers may be what causes the country\u2019s domestic automotive market to stall out.
As Iran\u2019s currency, the rial, suffers precipitous falls against the US dollar \u2014 down some 140 percent since President Donald Trump withdrew America from the accord \u2014 cars are growing more and more expensive even as tens of thousands clamor to order domestic models online. Meanwhile, Western manufacturers are pulling out of the country and foreign-produced parts are becoming harder to find as Chinese cars fill the void.
\u201cIt is clear and obvious that the US is purposefully putting pressure on the people of Iran to instigate discontent\u201d over the auto market, said Mohammad Reza Najfimaneh, the head of the Iranian Specialized Manufacturers of Auto Parts Association.
Iran, one of the Mideast\u2019s biggest countries and home to 80 million people, has a huge demand for automobiles. In 2017 alone, Iran produced more than 1.5 million cars, up some 14 percent from the year before, according to a report by Iran\u2019s Ministry of Industries, Mines and Trade earlier this year.
Some 90 percent of market share is controlled by two local companies: Iran Khodro, which assembles Peugeot-branded vehicles from kits, and SAIPA, which has made Citroens and Kias. Both manufacturers also build Renaults.
Iran\u2019s auto industry suffered under US and Western sanctions, which targeted Iran over fears about its nuclear program. The West worries Iran could use its technology to build atomic bombs. Iran long has said its program is for peaceful purposes.
The 2015 nuclear deal, which saw Iran limit its enrichment of uranium in exchange for the lifting of some sanctions, provided a needed boost to the industry.
French car-maker PSA Peugeot Citroen reached a deal in 2016 to open a plant producing 200,000 vehicles annually in Iran. Fellow French automobile manufacturer Groupe Renault signed a $778-million deal to build 150,000 cars a year at a factory outside of Tehran. Meanwhile, Volkswagen announced plans to import vehicles into Iran.
Now, however, those firms have pulled back on those plans.
Concern over Iran\u2019s domestic auto industry has been high. That was shown in a visit to Iran-Khodro last week by Ali Shamkhani, the secretary of Iran\u2019s Supreme National Security Council.
\u201cThe enemy in the economic war is after damaging public contentment and the auto industry is one of the front lines in the war,\u201d Shamkhani said during his visit.
More than 100,000 people are employed by Iran-Khodro and SAIPA, while another 700,000 Iranians work in industries related to car manufacturing.
There are fears by some business analysts in Iran that any downturn in the auto industry would further worsen unemployment in the country.
Iran\u2019s official unemployment rate is 12.3 percent, meaning some 3 million people are out of work, but experts believe it is much higher, especially among university graduates. Those unemployed often try to scrape enough money together to work as taxi drivers in the city, meaning they could be doubly hit.
Meanwhile, the drop in the Iranian rial has made buying a car difficult. The rial traded at 62,000 to the dollar before Trump\u2019s pullout from the nuclear deal in May. It has gone as high as 150,000 to $1 since.
\u201cI saved some money to buy an Iranian car, but prices jumped and factories do not provide cars on time,\u201d said Mahin Tabrizi, a 45-year-old teacher. \u201cI don\u2019t know what I can do.\u201d
Those prices also have hurt auto parts sales.
\u201cPrices of car parts are crazy, all because of the sanctions,\u201d said Mahmoud Rahimi, a taxi driver. \u201cI bought brake pads for my car for double the price in less than a year.\u201d
Even those who pay for an Iranian car can face delays in having them delivered. Iranian car production reportedly dropped 29 percent in June compared to the same month last year. Analysts blamed that on lack of parts due to currency fluctuation.
Meanwhile, importing a foreign car grows more expensive as the rial drops in value. Iran places import taxes of more than 100 percent on foreign cars. A ban on importing foreign cars also has been in force since April, halting new orders.
\u201cNearly two years ago, I paid for an imported car, yet they have not delivered it due to upheavals in the rial rate and sanctions,\u201d said Reza Piltan, a retired engineer waiting for an SUV by South Korean manufacturer SSangYong.
In the absence of Western car makers, however, China is already starting to show up in the country. A new dealership for Chinese automaker Chery recently opened in Tehran. Iranian lawmaker Vali Maleki, a member of the parliamentary committee on industry, last month suggested that Chinese companies can take over the share of other foreign companies that have left the Iranian market.
\u201cThe Chinese cars are selling very well in Iran,\u201d car dealer Ali Razavi said. \u201cTheir dealerships offer a wide range of methods of leasing and financing that enable many customers to buy a new car for just about $2,000 to $4,000.\u201d Those cars are partly assembled in Iran.
Demand is still strong for Iranian-made cars as well, however.
Last week, in less than an hour, 50,000 customers rushed the website of SAIPA to pay nearly $2,000 each to buy cars that the company plans to make in the future. The move is largely an effort by buyers to save on their purchases as the rial continues to fall. Another factory, Iran-Khodro, has a similar plan for selling future cars next week.
Still, anger over quality lurks.
\u201cIn other countries people pay small advance fees to buy a standard car based on installments,\u201d said Fatemeh Azari, whose son last week managed to buy a car on SAIPA\u2019s website. \u201cHere, we pay all the money in advance to receive a clunker months later.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

TEHRAN, Iran: Across Iran\u2019s capital, rush-hour traffic always grinds to a halt, a sea of boxy Renault four-doors and Peugeot coupes all idling their way through the streets of Tehran.Soon, however, Iran\u2019s faltering nuclear deal with world powers may be what causes the country\u2019s domestic automotive market to stall out.As Iran\u2019s currency, the rial, suffers…<\/p>\n","protected":false},"author":10,"featured_media":15887,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-15886","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-middle_east_news"],"_links":{"self":[{"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/posts\/15886","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15886"}],"version-history":[{"count":0,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/posts\/15886\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=\/wp\/v2\/media\/15887"}],"wp:attachment":[{"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15886"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15886"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/qatar-news.org\/qatarnewsEn\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15886"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}