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Iran and alternative methods of sourcing the vehicles have sprouted as a side-effect of the strict import policy. Rouhani made his call after receiving reports from three different ministries that specific groups in the country were ignoring the calls to halt vehicle imports. The president asked the judiciary to do whatever it takes to immediately address the situation, see that offenders are brought to justice and ill-gotten gains are restored to the public purse. “Thanks to the efforts by officials and based on all of the reports presented, we can speak of the possibility of organised corruption through the collaboration of some state agents, a computer company and several car importing firms,” said the president. Rouhani added: “[This action] is in line with my commitment to the principle of transparency and understanding of the necessity that government must start this campaign against corruption.”
Iran’s car market is slipping into recession, according to June 19 reports from Iranian media outlets. Tasnim News Agency reported, for instance, that potential car buyers are holding off from making purchases given the sudden price hikes introduced for new and second-hand vehicles. The price inflation has been caused by the collapse of the IRR. Car producers and importers in Iran have reluctantly but inevitably increased their vehicle prices. Imported vehicles have also been hit by the ‘invisible double tax’ as most are classed under the “luxury” label and are thus not eligible for the official rial to the dollar rate. Demand for cars continues to slide as a great many Iranians are priced out of buying locally assembled vehicles, including the more than 30-year-old Peugeot 405 model which continues to be produced under a joint venture arrangement with Iran Khodro (IKCO), Iran’s largest auto manufacturer. Second-hand vehicles have also increased in price in recent weeks as more buyers are pushed into the market.
Sudden price rises are not new to the Iranian car industry, and with each bout of devaluation of the IRR, prices usually ascend by a minimum of 5%.
Iranian car manufacturers are caught in a dilemma when it comes to the exchange rate fluctuation because they must limit their price hiking in accordance with figures which are set by a committee that comes under the Ministry of Industries, Mining and Trade. The committee, which consists of government ministers, is required to set prices on a monthly basis, but it is now under pressure to raise auto prices without alienating those left in the shrinking pool of car buyers.
9.1.3 Transport sector news
Iranian Vice President Eshaq Jahangiri arrived in the Caspian Sea free trade zone and town of the same name Bandar Anzali to inaugurate several industrial and commercial projects including the China-Kazakhstan-Iran Shipping Corridor, according to Iran Labour News Agency on June 26. Tehran is actively pushing companies to open in the northern port town which acts as a gateway to and from Russia and the CIS. The port is also playing a role in connectivity via rail, with onward connections to Turkey and Azerbaijan.
He emphasized that for the first time the railway will be used as an important link for carrying some of the cargo coming across Kazakhstan and the Caspian Sea to Iran, adding that creating good and effective relations with the countries around the Caspian Sea is an objective for Iran.
The Supreme Council for Free Trade, Industrial and Special Economic Zones lately said it is to offer a 70%-discount on export tariffs to companies setting up in port locations on the Caspian Sea including Bandar Anzali.
40 IRAN Country Report August 2018 www.intellinews.com