Tehran, Iran – Hossein, a 32-year-old advertising and marketing specialist based mostly in Tehran, has been considering of changing his 13-year-old Iranian-made automotive with a more recent mannequin.
Though he earns about four-and-a-half instances the minimal wage after a current pay rise – his wage is now near 900 million rials (about $390 on the present alternate fee) – imported automobiles aren’t even remotely reasonably priced for him.
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Even discovering a domestically made automotive is perhaps out of his funds, with an financial disaster gripping the nation for the reason that United States and Israel launched a shock conflict on Iran on February 28 and later enacted a crippling siege and sanctions on the nation.
“I’m dropping hope of ever with the ability to purchase a brand new home manufacturing automotive too, except the nation opens up and turns into a bit extra regular once more,” Hossein, who requested to maintain his full title confidential for safety causes, informed Al Jazeera.
His outdated handbook Peugeot 206 mannequin, an initially French-made automotive however now produced domestically after international counterparts left Iran on account of sanctions, can fetch as much as 10 billion rials ($4,350) if he sells it in the direction of making a brand new buy. Nevertheless, his substitute choices are restricted.
Upgrading to a barely improved Peugeot 207 with an automated gearbox might value him 28 billion rials ($12,170) now. Which means that, after promoting his automotive, he would wish greater than 20 months of his total wage.
A home sedan Shahin mannequin prices greater than 31 billion rials ($13,480), and a crossover Reera is priced at greater than 43 billion rials ($18,700).
With these choices, he would wish to avoid wasting about 24 months and 37 months of his entire wage, respectively, and that’s if costs stay secure and he doesn’t spend a rial on the rest. However the reality of the fast-rising living costs and lagging incomes in Iran means he can barely put apart any cash, not to mention afford a brand new automotive.
Home automotive costs have largely risen 40 to 80 % for the reason that begin of the conflict, whereas some automobiles promote for greater than 130 % of their September 2025 prices.
The prices of sustaining the automobiles are additionally rising a lot sooner than individuals’s salaries. Domestically produced tyres, motor oil, brake pads and clutch kits have at the very least doubled since final 12 months, with some automotive components having greater than tripled in worth.
Home automobiles have typically low security requirements, which means that they contribute to staggering highway accident deaths. No less than 1,609 Iranians have been killed up to now on intercity roads within the present month of Shahrivar of the photo voltaic Hijri calendar, which ends on September 22. Greater than 20,000 individuals lose their lives on the roads yearly. Compared, fewer individuals in the entire of the European Union, practically 5 instances Iran’s inhabitants, died on roads final 12 months.
Iran’s fuel-guzzling vehicles additionally contribute to smoke-congested metropolis streets, degrade automobiles sooner and improve gasoline prices, simply as petrol prices have risen for customers.
How did we get right here?
Consultants say, on account of a mixture of protected state-linked companies, privileged entry, financial isolation and a curtailing of imports, Iranian households don’t have any selection however to pay exorbitant costs – in contrast with their salaries – to purchase low-quality vehicles.
The injury from the conflict, together with the extensive bombing of multiple steel giants by Israel and the US, has solely added insult to harm. The naval blockade of Iran’s southern ports has prevented items coming in from common neighbouring markets just like the United Arab Emirates.
Below such circumstances, home car producers have little incentive to enhance.
Finish prospects are additionally beset by authorities fees, foreign money and financing prices, margins levied by murky intermediaries – and in quite a few documented circumstances, trade corruption.
“Individuals are pressured to purchase costly low-quality vehicles whose actual costs must be 1 / 4 of worldwide costs, and it is a direct hurt performed to them,” Mohammad Rashidi, a member of the presiding board of Iran’s parliament, informed native media on Saturday. “The traces of a mafia system are seen all through the method.”
His claims echo these of different officers and state-linked media, who’ve brazenly described the trade as resembling an organised crime operation.
Based on the newest figures launched by state media, about 233,000 vehicles have been manufactured or assembled in Iran within the first 5 months of 2026, in contrast with 366,000 the 12 months earlier than. Solely about 25,000 automobiles have been imported in that interval.
Solely a handful of state-linked corporations or intermediaries are allowed to import automobiles, with duties plus value-added tax rising remaining costs as much as 200 %.
The federal government and parliament have mentioned decreasing import tariffs this 12 months, with no settlement introduced up to now.
The premiums are extra seen for high-end vehicles, with a 2026 Toyota Land Cruiser VXR going for roughly 660 billion rials ($287,000) in Iran in the intervening time, whereas the identical mannequin is out there for about $86,000 within the UAE. The identical story applies to most different fashions, at totally different charges relying on the rarity of the car and the supply of components.
The worth of a mid-range Chinese language-designed SUV offered as Exeed VX in worldwide markets is listed at about $32,000 in China, whereas it’s priced at about $42,000 within the UAE. The identical automotive, assembled from imported components by a state-linked firm in Iran below a distinct title, presently prices Iranian prospects the equal of $53,000.
The weird state of affairs was on full show throughout a three-day “worldwide” automotive exhibition in Tehran final week that largely featured Chinese language-manufactured automobiles. These stay out there in Iran regardless of the US sanctions, since Tehran exports nearly all of its oil to China and barters this for items, together with vehicles.
Some home producers and importers have been absent, both as a result of that they had no merchandise to supply or as a result of that they had indignant prospects who registered months in the past to get automobiles they by no means obtained. Spare components for among the automobiles on show are presently both not out there within the Iranian market or value a number of instances their worth in worldwide markets.
Even the most affordable automobiles supplied on the exhibition have been utterly unaffordable to the typical Iranian. It might take a employee on the minimal wage with normal allowances 50 years to purchase an XPENG G9, a Chinese language-made electrical SUV priced at 120 billion rials ($52,150), on his or her wage, with out spending a rial on meals, housing or clothes.
Nonetheless, there have been big queues outdoors the exhibition centre every of the three days.
“It was unhappy as a result of most individuals simply got here to take photos with the vehicles they knew they may by no means afford,” a younger man who attended the exhibition informed Al Jazeera. “The doorways of the vehicles have been locked too.”
