Car imports and the crises resulting from them have become one of the major issues in Iran today. In fact, Iran’s automobile market has for years been plagued by monopoly, unrealistic pricing, and consumer dissatisfaction. In recent years, the Iranian regime promoted an import policy, presenting it as a solution to increase competition and reduce prices. However, market developments show that imported vehicles have not only failed to regulate the market but have also created a new form of monopoly and rent-seeking.
The state-run Eghtesaad24 website wrote on June 5: “Car imports were supposed to unlock the market; with the arrival of foreign vehicles, the monopoly was supposed to be broken, competition was supposed to emerge, and Iranian consumers were supposed to be able to purchase a quality product at a reasonable price after years of waiting. But what has happened in practice is the reproduction of the same old monopoly in a new form, not market liberalization.”
From Inflation to Food Insecurity, Iran Is Moving Toward a Hidden Famine
Car Imports and the Transfer of Monopoly from Manufacturing to Importing
For years, public criticism was directed at domestic automakers. Many believed that the lack of competition had led to declining quality and rising prices. Using the same argument, the Iranian regime advocated for the liberalization of car imports.
However, the experience of recent years has shown that the monopoly has merely shifted from manufacturing to importing. Today, the importation of foreign vehicles is controlled by a limited number of companies. Each global brand is effectively imported by one or two specific firms, and buyers are forced to accept the terms and prices set by those companies.
Under such circumstances, car imports have reproduced a monopolistic structure rather than creating competition. Consumers have little real choice, and the market remains deprived of the natural mechanisms of competition.
Car Imports and Lack of Transparency in Pricing
One of the most important questions surrounding car imports concerns how prices are determined. In global markets, vehicle prices, transportation costs, taxes, and company profits are generally transparent.
Economic experts have repeatedly warned about these pricing discrepancies. Nevertheless, importing companies have not provided transparent explanations regarding pricing details. This has increased suspicions about rent-seeking and behind-the-scenes connections within the market.
Many critics believe that the lack of transparency in foreign vehicle imports prevents consumers from understanding the true costs of importation and creates opportunities for excessive profits.
The Volvo S90 Case; A Symbol of Enormous Price Discrepancies
The latest controversial example in the car import market involves the Volvo S90 plug-in hybrid. According to published information, the vehicle is priced at approximately 499,900 yuan in the Chinese market. Calculations indicate that, based on the free-market exchange rate, the vehicle’s value is about 128 billion rials. However, its announced sale price in Iran has reached approximately 290 billion rials (about $161,000).
This discrepancy has triggered a wave of criticism. Many are asking how shipping, insurance, tariffs, and taxes could justify such a large gap, particularly given that hybrid vehicles are subject to lower tariffs than gasoline-powered cars. The case has once again brought the issue of foreign vehicle imports to the forefront of economic and media discussions and intensified calls for transparency.
The Economic Power of Importers and Lack of Accountability
According to the state-run outlet, critics believe that part of the problem stems from the economic and political structure of companies active in the vehicle import sector. These firms are not merely economic actors, and some reportedly benefit from extensive networks of influence and support.
In competitive markets, the presence of multiple importers typically leads to lower prices. However, such a mechanism does not exist in the current monopolistic market. As a result, many citizens view these imports not as a tool for competition but as a vehicle for distributing special privileges among select groups.
Car Imports; A Market for the Public or Business for the Privileged?
The Iranian regime’s stated objective for allowing car imports was to regulate the market and expand consumer choice. However, most imported vehicles are now offered at prices beyond the purchasing power of a large segment of society. Under these conditions, the influx of imported vehicles has failed to significantly reduce domestic car prices. At the same time, imported cars have become luxury goods affordable only to a limited group.
This situation has raised serious questions about the real objectives of the car import policy. Until full details regarding pricing, the allocation of import licenses, and the relationships between importing companies and centers of power are disclosed, public opinion is likely to view this market as yet another example of structural corruption and the distribution of special privileges among groups close to the ruling establishment. The issue of imported vehicles has once again highlighted the importance of transparency and accountability in Iran’s economy.
