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Iran’s Automotive Industry and Corruption

Iran’s economy is mired in corruption, and this fact does not require any peering into the gloom. It is impossible to find an industry in Iran free of corruption, and the automotive industry is not an exception.

With thousands of annual road deaths, Iranian cars are dubbed “Chariots of Death.” But the corruption in Iran’s automotive industry hasn’t merely resulted in low-quality vehicles. Thousands of luxurious vehicles are imported by mafias linked to the regime officials.

Iran’s automotive industry is dominated by the Revolutionary Guards (IRGC). Meanwhile, regime officials. Including members of parliament squandering national wealth by importing the most expensive cars. Thus, grabbing the lion’s share of Iran’s automotive industry has aggravated the regime’s infighting.

On May 6, 2020, the Iranian regime’s Supreme Leader Ali Khamenei invited the IRGC to further plunder Iranians by entering the car manufacturing business.

“The mindset that can produce a satellite and target the next 36,000-kilometer orbit to send the next satellite can certainly have the creative spirit for car production with five liters of gasoline per 100 kilometers and other parts of production,” Khamenei said, according to the state-run Ana news agency.

The IRGC thugs did not waste any time and used Khamenei’s words as the starting point to dominate the automotive industry.

On May 28, 2020, the state-run Tasnim news agency, linked to the IRGC Quds Force, reported that IRGC’s Aerospace commander, Amir Ali Hajizadeh, visited the Iran Khodro factory. According to Tasnim, the visit paved the way to produce low-fuel cars, which the Supreme Leader had emphasized.

The state-run Ensaf News Agency reported on June 9, 2020, that Hajizadeh announced in a joint meeting with the Acting of the Ministry of Industry, Mines and Trade and CEOs of the automotive industry that help is needed for the country’s economy and industry.

Two years on, the so-called IRGC’s “help” has resulted in more road deaths. Some state media report that at least 15,000 people lost their lives in road accidents.

Kamal Hadianfar, head of Iran’s traffic police, recently acknowledged how the low-quality vehicles produced by the IRGC’s dominated factories have caused more deaths.

“Reducing the thickness of the fuel tank of domestic cars is one of the causes of them catching fire and exploding in accidents. [Factories] produced nearly 900,000 vehicles last year, and if these numbers are true, it can be calculated how much profit they have made in a year by reducing the thickness of the fuel tank,” Hadianfar acknowledged, according to the state-run Tejarat news on March 19, 2022.

So, the IRGC made huge profits at the expense of tens of thousands of people dying in car explosions and accidents every year. What could be expected from a terrorist entity that wreaks havoc in the region and shoots a commercial airliner, killing innocent civilians?

It should be noted that despite the sharp decline in car production in Iran, the car market, estimated at $15 billion a year, is still one of the most important and attractive markets for production and brokerage in Iran’s bankrupt economy.

The regime-affiliated companies continued hoarding cars, causing an artificial rise in demand, allowing them to increase car prices.

Storing cars in the open has caused the delivered vehicles to have problems after completion. For instance, keeping the vehicle under the sun for long causes some parts to wear out. Automakers continued to stockpile cars to raise car prices while blaming sanctions.

Besides, the manufactured cars have low-quality parts. Iran’s state media recently reported a massive corruption case of Cruise and Azaam, two large car component companies. These two companies had embezzled up to 500,000 billion rials, or $1.8 billion at the free-market exchange rate.

“Corruption within the automotive industry is supported by powerful non-governmental organizations [IRGC]. Some parts manufacturers are involved in appointing the CEO. These companies are the ones who later supply the parts needed by the automakers,” the state-run ANA Press quoted Hushang Ahmadi, Chairman of the Board of Directors Saipa Logistics, as saying on January 25, 2022.

By circumventing the sanctions, the two companies were importing low-quality parts from China and selling them to Iranian car companies in the name of “domestic products.”

With 26.92% of Iran Khodro shares and a few percent of Saipa shares, and 62.99% of Bahman Automotive Group shares, Cruz Company has the privilege of purchasing these companies’ products.

Importing Cars

While many Iranian media outlets and officials believe importing cars could end corruption, a closer look reveals their true colors and real concern, which is keeping the lion’s share of this lucrative business.

The Iranian regime’s former president, Hassan Rouhani, published a report in 2018 about the mafia importing cars amid the regime’s rampant infightings.

“The report introduces the main groups involved in violations related to registering orders for imported cars. This includes some of the Industry Ministry officials, several automotive-importing companies, and some of the software company employees responsible for maintaining the Car Import Order Registration website,” read the report, by the state-run news agency, ISNA, on July 14, 2018.

“Outflow of foreign currency for importing cars is not only limited to the country’s so-called legal import points but government-linked and family mafia groups also have a hand in illegally importing foreign vehicles, so much so that prosecutor Mohammad-Jafar Montazeri had earlier spoken of a legal case being filed in Bandar-Abbas courthouse for 424 illegally imported vehicles,” the state-run Khabar TV channel website weighed on this issue on June 22, 2018.

What has Raisi’s government done?

In June 2021, Khamenei pulled Ebrahim Raisi out of the ballot box in a bid to consolidate power. Raisi made hollow promises and a great deal of fanfare about “combatting corruption.” Yet, the real reason for his ascendence to the presidency, while being an unscrupulous mass murderer, was the regime’s desperate attempt to control Iran’s volatile society through suppression.

As a result, Raisi has been only making promises of economic reform, and Iran’s automotive industry is no exception. His ridiculous gestures, and those of his ministers, are even mocked by the state-run media.

“In November, Reza Fatemi Amin, Minister of Mines Trade and Business, promised that car prices in the market would gradually decrease by the end of the year. Yet, simple research shows that this product has become significantly more expensive,” the state-run Eghtesad News wrote on March 9.

Raisi visited an automotive factory on March 8 and abruptly issued seven orders bereft of any plan! The regime officials and media also reacted to this.

The sudden presence of Ebrahim Raisi in one of the automotive companies and issuing eight-point order, similar to what we see from him on most provincial trips, prompted a former member of parliament to respond. Bahram Parsai said, “To prove that it does not benefit from the monopoly of the car market, the government should allow ordinary citizens to be allowed to import cars,” the state-run Eghtesad news added.

Conclusion

The Iranian regime has no intention of addressing the country’s crises. As their founder, Ruhollah Khomeini, said, preserving the regime is the first and foremost goal of the mullahs. They are ravaging Iran’s economy and all industries in order to fund their regional adventurism and keep their repressive apparatus. Thus, producing low-quality cars that have increased the fatality rate of Iran’s road accidents is not by any means accidental. The genocidal regime, which has Raisi as its president, aims to plunder and squander people’s wealth and slaughter them, directly or indirectly.

The ongoing protests across Iran by people from all walks of life are the broadest display of anger toward their main enemy, the ruling theocracy. As they chanted in their protests, “Our enemy is right here; they lie when they say it’s America.”