The head of Iran Auto Importers Association said that a recent decision by the government to ban the import of cars will create further economic turmoil in the market, and that the private sector will take the brunt of the move.
"In general, even without a ban on the import of cars, vehicles’ total share from Iran’s import market could be minimal," Farhad Ehteshamzad told Trend.
Noting that import of cars to the country has seen a 75-percent decline in the first two months of the current Iranian fiscal year (started March 21), he said the ban on import of cars and 1400 other items could cause an economic upheaval and lead to additional expenses for the private sector.
"There should have been a logic behind the decision and maybe macroeconomic policies have led to this, but the ban will create problems for the economic activists who have been active in the import of goods for a long time as they have banking and customs-related commitments to their foreign partners," the official said.
In 2016, a total of 85,000 vehicles were imported into Iran, Ehteshamzad said, adding that the number reached to 76,000 in 2017.
"The import of cars was experiencing a decreasing trend in the normal way and without a ban," he noted.
All the items banned by the government needed an overall sum of $4 billion in order to be delivered into the country, he pointed out, concluding that the decision has naturally increased the risk of investment in the country.
On June 20 Iranian Minister of Industry, Mine and Trade Mohammad Shariatmadari called on all relevant organizations to put on hold import orders of some 1400 goods, including usual and green vehicles.
The decision is reportedly part of efforts to stop illegal imports of goods to the country and control rising prices across Iran.
This is while experts believe that the move by the government would further exacerbate the situation and increase the prices of all goods, including vehicles.
Chairman of Parliament Economic Commission Mohammad Reza Pour-Ebrahimi said recently that the move aims to save foreign currencies, avoid the issue of capital flight and stop foreign investors withdrawing some $10 billion from the country.
The prices of different models of cars reached record highs on the Iranian market on June 11, rising between to 20 million and 400 million rials over the past 10 days.
According to Iranian media, the rise between 20 million and 400 million rials in the price of cars is due to foreign car manufacturers leaving Iran.
Peugeot Citroen, Mazda and Hyundai are among the car manufacturers that have already left the country due to the threat of US sanctions. Meanwhile, some other manufacturers have limited their output, and this has led to a further rise in prices.