Monday, May 1, 2023

Iran's car mafia

A mafia-like group is behind a ban on car imports to eliminate competition in Iran's auto industry. Policymakers are indirectly supporting Chinese auto parts manufacturers and turning the industry into "assemblers of Chinese parts". Iran's automotive industry, the largest after oil and gas, employs 700,000. Iran builds nearly 1.5m vehicles annually with the two largest automakers Iran Khodro and Saipa enjoying a monopoly. The sector is in debt for billions and is a burden for the government. Officials have repeatedly warned about inadequate safety standards of domestic cars. After massive collisions in Iran during which all the cars airbags failed to open, officials called domestically produced cars "carriages of death".
Lawmakers are responsible for rising car prices. Iran's centrally-run economy is rife with political interference and corruption. A falling Iranian currency has created 50% annual inflation rate and US sanctions contribute to economic woes.