A China SUV sells for US$53,000 in Iran: War, sanctions and the deformed car market under "special national conditions"

Iran does not lack people who want to buy cars, but what it lacks is affordable roads. At present, this road is still largely blocked by exchange rates, blockades, taxes and fees and a few licensed middlemen...

Photo source: Hiru news

According to Al Jazeera, Hossein, a 32-year-old marketing practitioner in Tehran (using a pseudonym at his request), has recently been trying to replace a 13-year-old Iranian-made car.

He has just recently received a salary increase, and his monthly salary is about 900 million rials-equivalent to about US$390 at current exchange rates-is already about 4.5 times the local minimum wage. But even so, he is still a long way from buying an imported car, and even buying a new domestically produced car is unrealistic.

Unless the country returns to normal operation, I see no hope of buying a new domestically produced car. Hossein told Al Jazeera.

If his manual transmission Peugeot 206 (originally a French brand, but later after the withdrawal of foreign partners and continued to be produced by local Iranian companies) is sold, it can currently sell for about 10 billion rials, equivalent to about 4,350 US dollars. But the problem is that almost all of the alternative models he can choose exceed budget.

Replace it with an automatic transmission Peugeot 207, which currently sells for about 28 billion rials, equivalent to about 12,170 US dollars. After selling the old car, he still had to save all his salary for more than 20 months without food or drinking.

The domestic sedan Shahin sells for more than 31 billion rials, or about US$13,480, and requires him to save about 24 months of his salary.

The crossover Reera sells for more than 43 billion rials, or about $18,700, and takes about 37 months to save.

These numbers are based on the premise that prices will no longer rise and that nothing will be spent except buying a car. But the reality is that the cost of living in Iran continues to rise rapidly, and Hossein has little left to save, let alone change a car.

After the war, car prices soared

On February 28, 2026, the United States and Israel launched a raid on Iran, and subsequently imposed blockade and sanctions. Since the outbreak of the war, the prices of domestic Iranian vehicles have generally increased by 40% to 80%, and the prices of some models have been more than 130% higher than in September 2025.

Not only car prices, but car costs are also soaring. The prices of domestic consumables such as tires, oil, brake pads, and clutch kits have at least doubled compared with last year, and the price of individual parts has increased more than threefold.

At the same time, the safety level of Iranian-made vehicles has been low for a long time, and the road safety data is shocking: in the current August month of Shahrivar in the Iranian solar calendar alone (as of September 22), the number of deaths on intercity roads across the country has reached 1,609; more than 20,000 people die in traffic accidents every year. By contrast, last year the number of road deaths across the EU-nearly five times that of Iran-was less than half that figure.

If you buy an expensive and poor car, the real price should be only one-quarter of the global price

Mohammad Rashidi, a member of the Presidium of the Iranian Parliament, recently told local media: People are forced to pay high prices to buy low-quality cars. The real price of such cars should be only one-quarter of the global price. This is a direct harm to the people. Traces of the 'gang system' can be seen everywhere throughout the process.

His account is consistent with public statements by other Iranian officials and state media-who have not shied away from describing the industry as a model of operation similar to organized crime.

From the supply side, Iran's situation is closed. In the first five months of this year, Iran produced and assembled about 233,000 vehicles domestically, a sharp drop from 366,000 vehicles in the same period last year; only about 25,000 vehicles were imported during the same period, and only a few state-owned enterprises or middlemen were allowed to carry out import business. Tariffs and value-added tax push the terminal price up to about twice the international market level.

The government and parliament have discussed reducing import tariffs many times this year, but no agreement has been reached so far.

This closed and increased tax structure is directly reflected in the terminal price:

A 2026 Toyota Land Cruiser VXR currently sells for approximately 66 billion rials,equivalent to approximately 287,000 US dollarsin Iran; while in the United Arab Emirates, the same model is approximately 86,000 US dollars.

A mid-to-high-end SUV called Exeed VX on the international market sells for about US$32,000 in China and US$42,000 in United Arab Emirates; while in Iran, it is assembled from imported parts by state-owned companies under other brand names, and the terminal price is about US$53,000.

China elements at the Tehran Motor Show

Last week, Tehran held a three-day international automobile exhibition with vehicles mainly made in China. Local Iranian manufacturers and some importers were absent-some because there were no cars to show off, and some because a large number of booking customers had not received their cars, which had caused dissatisfaction. Parts for some models on the booth are currently either not available in Iran or the price is several times higher than that in the international market.

Even so, three days after the auto show, there was still a long line at the entrance.

One visitor told Al Jazeera: It's sad. Most people just come to take photos with a car they know they can't afford in their life. The car door was also locked.

The cheapest show car is also out of reach for ordinary Iranians: Take China's new energy vehicle Xiaopeng G9 electric SUV as an example, with a price tag of 12 billion rials, equivalent to approximately US$52,150. Even if a worker on the minimum wage does not generate a penny of food and accommodation, it will take 50 years to save enough.

It is worth noting that these China brand models can still be sold normally in Iran-the reason is straightforward: almost all of Iran's oil exports to China, where goods are bartered, and China goods, including cars, are an important settlement method.

written in the end

This report reveals a key contradiction in the Iranian car market: it is not that there is no demand, it is that it cannot be purchased.

There are a few points worth digesting:

First, Iran's purchasing power structure is very different from that in the country. Even local people who have formal jobs and earn 4.5 times the minimum wage need to save their entire income for two to three years to buy a basic domestic new car. Changing to an imported car is even more impossible. When quoting exports, we cannot simply estimate the purchasing power of the local RMB equivalent. What depends more on the foreign exchange resources and actual willingness to pay that the other party can use.

Second, the Iranian market currently does not exclude China brands, but after-sales and accessories are long-term shortcomings. Some vehicle parts at the exhibition could not be purchased or the prices were abnormally high, indicating that the whole vehicle had entered and the service system had not kept up. For the export of used cars, buyers will not only pay attention to whether a car can reach Hong Kong, but also how to handle daily maintenance after buying it.

After all, Iran does not lack people who want to buy cars, but affordable roads. At present, this road is still largely blocked by exchange rates, blockades, taxes and fees and a small number of licensed intermediaries. For China companies preparing to enter this market, it is more important to understand the rules than to get quotas.

Source: Guangdong Good Car

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