An unaffordable car market highlights Iran’s cost-of-living crisis

Tehran, Iran – Hossein, a 32-year-old selling specializer based successful Tehran, has been reasoning of replacing his 13-year-old Iranian-made car with a newer model.

Even though helium earns astir four-and-a-half times the minimum wage aft a caller wage emergence – his wage is present adjacent to 900 cardinal rials (about $390 astatine the existent speech rate) – imported vehicles are not adjacent remotely affordable for him.

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Even uncovering a locally made car mightiness beryllium retired of his budget, with an economical situation gripping the state since the United States and Israel launched a astonishment warfare connected Iran connected February 28 and aboriginal enacted a crippling siege and sanctions connected the country.

“I’m losing anticipation of ever being capable to bargain a caller home accumulation car too, unless the state opens up and becomes a spot much mean again,” Hossein, who asked to support his afloat sanction confidential for information reasons, told Al Jazeera.

His aged manual Peugeot 206 model, an primitively French-made car but present produced domestically aft overseas counterparts near Iran owed to sanctions, tin fetch up to 10 cardinal rials ($4,350) if helium sells it towards making a caller purchase. However, his replacement options are limited.

Upgrading to a somewhat improved Peugeot 207 with an automatic gearbox could outgo him 28 cardinal rials ($12,170) now. This means that, aft selling his car, helium would request much than 20 months of his full salary.

A home sedan Shahin exemplary costs much than 31 cardinal rials ($13,480), and a crossover Reera is priced astatine much than 43 cardinal rials ($18,700).

With these options, helium would request to prevention astir 24 months and 37 months of his full salary, respectively, and that is if prices stay unchangeable and helium does not walk a rial connected thing else. But the reality of the fast-rising surviving costs and lagging incomes successful Iran means helium tin hardly enactment speech immoderate money, fto unsocial spend a caller car.

Domestic car prices person mostly risen 40 to 80 percent since the commencement of the war, portion immoderate vehicles merchantability for much than 130 percent of their September 2025 costs.

The costs of maintaining the vehicles are besides rising overmuch faster than people’s salaries. Domestically produced tyres, centrifugal oil, brake pads and clutch kits person astatine slightest doubled since past year, with immoderate car parts having much than tripled successful price.

Domestic vehicles person mostly debased information standards, meaning that they lend to staggering roadworthy mishap deaths. At slightest 1,609 Iranians person been killed truthful acold connected intercity roads successful the existent period of Shahrivar of the star Hijri calendar, which ends connected September 22. More than 20,000 radical suffer their lives connected the roads each year. In comparison, less radical successful the full of the European Union, astir 5 times Iran’s population, died connected roads past year.

Iran’s fuel-guzzling cars besides lend to smoke-congested metropolis streets, degrade vehicles faster and summation substance costs, conscionable arsenic petrol prices have risen for users.

How did we get here?

Experts say, owed to a operation of protected state-linked businesses, privileged access, economical isolation and a curtailing of imports, Iranian households person nary prime but to wage exorbitant prices – compared with their salaries – to bargain low-quality cars.

The harm from the war, including the extensive bombing of aggregate alloy giants by Israel and the US, has lone added insult to injury. The naval blockade of Iran’s confederate ports has prevented goods coming successful from fashionable neighbouring markets similar the United Arab Emirates.

Under specified circumstances, home conveyance manufacturers person small inducement to improve.

End customers are besides beset by authorities charges, currency and financing costs, margins levied by murky intermediaries – and successful galore documented cases, manufacture corruption.

“People are forced to bargain costly low-quality cars whose existent prices should beryllium a 4th of planetary prices, and this is simply a nonstop harm done to them,” Mohammad Rashidi, a subordinate of the presiding committee of Iran’s parliament, told section media connected Saturday. “The traces of a mafia strategy are disposable passim the process.”

His claims echo those of different officials and state-linked media, who person openly described the manufacture arsenic resembling an organised transgression operation.

According to the latest figures released by authorities media, astir 233,000 cars were manufactured oregon assembled successful Iran successful the archetypal 5 months of 2026, compared with 366,000 the twelvemonth before. Only astir 25,000 vehicles were imported successful that period.

Only a fistful of state-linked companies oregon intermediaries are allowed to import vehicles, with duties positive value-added taxation expanding last prices up to 200 percent.

The authorities and parliament person discussed lowering import tariffs this year, with nary statement announced truthful far.

Cars permission a ferry arsenic ships stay anchored connected May 16, 2026 successful the Strait of Hormuz adjacent Larak Island, Iran [File: Majid Saeedi/Getty Images]

The premiums are much disposable for high-end cars, with a 2026 Toyota Land Cruiser VXR going for astir 660 cardinal rials ($287,000) successful Iran astatine the moment, portion the aforesaid exemplary is disposable for astir $86,000 successful the UAE. The aforesaid communicative applies to astir different models, astatine antithetic rates depending connected the rarity of the conveyance and the availability of parts.

The terms of a mid-range Chinese-designed SUV sold arsenic Exeed VX successful planetary markets is listed astatine astir $32,000 successful China, portion it is priced astatine astir $42,000 successful the UAE. The aforesaid car, assembled from imported parts by a state-linked institution successful Iran nether a antithetic name, presently costs Iranian customers the equivalent of $53,000.

The bizarre concern was connected afloat show during a three-day “international” car accumulation successful Tehran past week that mostly featured Chinese-manufactured vehicles. These stay disposable successful Iran contempt the US sanctions, since Tehran exports astir each of its lipid to China and barters this for goods, including cars.

Some home manufacturers and importers were absent, either due to the fact that they had nary products to connection oregon due to the fact that they had aggravated customers who registered months agone to get vehicles they ne'er received. Spare parts for immoderate of the vehicles connected show are presently either not disposable successful the Iranian marketplace oregon outgo respective times their terms successful planetary markets.

Even the cheapest vehicles offered astatine the accumulation were wholly unaffordable to the mean Iranian. It would instrumentality a idiosyncratic connected the minimum wage with modular allowances 50 years to bargain an XPENG G9, a Chinese-made electrical SUV priced astatine 120 cardinal rials ($52,150), connected his oregon her salary, without spending a rial connected food, lodging oregon clothing.

Still, determination were immense queues extracurricular the accumulation centre each of the 3 days.

“It was bittersweet due to the fact that astir radical conscionable came to instrumentality pictures with the cars they knew they could ne'er afford,” a young antheral who attended the accumulation told Al Jazeera. “The doors of the cars were locked too.”