News about the allocation of a large share of the automotive industry’s government-supplied foreign currency to assembly companies has once again made headlines, even as some of these companies have low levels of localization and sell their products to Iranian consumers at prices far higher than those in neighboring countries. At the center of these criticisms is the performance of Modiran Khodro and the way it receives and uses foreign currency.
An examination of data on foreign currency allocated to the automotive industry from 2021 to 2025 shows that, out of approximately $10.5 billion in foreign currency resources, more than $6 billion was allocated to Modiran Khodro. This figure raises serious questions about how resources are distributed and how their use is monitored.
Sharp Decline in the Value of the Iranian Rial Against the U.S. Dollar
This amount of foreign currency was received even though, after more than two decades of cooperation with Chinese automaker Chery, the share of locally produced components in this group’s products is still reported to be less than 20%. By contrast, some of the company’s assembled vehicles are sold in Iran at prices as much as two and a half times those of comparable models in neighboring countries.
The Price Difference Between Vehicles in Iran and Abroad
Another point of contention is the amount of foreign currency required to produce each vehicle. The average foreign currency requirement for each vehicle should be around $9,000, but this figure has reached approximately $13,700 per vehicle for Modiran Khodro’s total production of 430,000 units.
Mojtaba Yousefi, a member of the Iranian regime’s parliament, has also objected to the allocation of foreign currency and the pricing of the company’s products. Referring to the allocation of billions of dollars in foreign currency and financial resources to the group, he said that vehicles sold in Iran for around 80 to 90 billion rials (approximately $40,000 to $45,000) are sometimes offered in countries in the region for about one-third of that price.
According to the lawmaker, the use of intermediaries in the country of origin and the inflation of the value of import invoices in yuan could be among the factors driving up the final cost of imported and assembled vehicles, with the resulting cost ultimately imposed on Iranian consumers.
Production figures also paint a different picture of the claims made about the company’s capacity. In 2025, it was supposed to produce 220,000 vehicles, but final production was reported to be only around 40,000 units. At the same time, approximately $1.4 billion in foreign currency was allocated to the group, which, based on the reported production, puts the foreign currency requirement at around $35,000 per vehicle.
Taken together, these figures have once again raised debate over preferential foreign currency allocations, the pricing of assembled vehicles, the actual level of localization, and oversight of resource allocation in Iran’s regime-controlled economy.
The $6 billion in foreign currency was looted by these government-affiliated factions even as the quality of domestically produced vehicles remains extremely poor, with many deaths in road accidents attributed to this poor vehicle quality.
