Iran to reduce tariffs on car imports to 100 percent - menaREPORT

Heh.

Iran's domestic auto industry produces famously outdated gas guzzling cars that have changed little since the 1970s.

IranMania adds this to the story linked to above: "The decision made in the open session of the Parliament was said to be aimed at paving the grounds for foreign car imports to facilitate the enhancement of the qualities of the domestic cars, optimize their fuel consumption rate, improve the public transportation system as well as reduce the public transportation costs." (emphasis added)

Today the number one car in production and sales in Iran is the Peykan, a Hillman Hunter from the 1970s. Go to the story, Top 20 Car Maker You've Never Heard Of, for a detailed analysis of the company and its potential to be competitive in the world market.
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+++++++Kohdro Peykan 2005 (nee Hillman Hunter of 1970s)

The price of gasoline in Iran is held very low. A plausible explanation is that this is a way for the government to share oil wealth with the governed and maintain legitimacy. While the price of gasoline means incentives to purchase fuel efficient cars is weak it also means the government has some interest increasing fuel efficiency. Thus, the government's motive to increase competition in the supply of automobiles.

Teachable moment: This story has strong parallels to the North American experience of the 1970s, when the big 3 automakers where lobbying in Washington for protection from fuel efficient Japanese imports. They lost that battle, but the Big 3 survived by figuring out how to compete with the Japanese, and later the Koreans.