Central Bank of Iran in rift with carmakers over new loan

Business Materials 15 November 2015 18:49 (UTC +04:00)

Tehran, Iran, November 15

By Mehdi Sepahvand -- Trend:

The Central Bank of Iran has frustrated Iranian carmakers' efforts to find a remedy for the stagnant vehicle market by announcing that it would give loans to only a limited number of car buyers in a new round of sales.

The rift reached its peak on November 14 when the bank wrote a letter to Iranian car makers, stating that it would not give loans to more than 110 thousand car buyers who had stormed the car market after months of protest under the "don't buy" campaign, Tasnim news agency reported November 15.

This week Iranian car markers announced that they were selling cars with exceptional facilities to be offered by the Central Bank.

This was a move to end the stagnation that has taken Iran's car market for months.

Iranians went on strike by not buying cars under the "don't buy" campaign in late summer, furious that they had to pay large sums of money for cars that lacked safety, quality, and efficiency.

The campaign, which came in anticipation of a more colorful car market in the post-sanctions Iran, brought car makers to their knees, with many production lines going idle and many part making factories bankrupt.

The government agreed to pay the loans as part of an economic stimulus which was aimed at breathing new life in the market by helping production in the form of stimulating the purchase of home-made products.

Following the Central Bank's letter, car makers called an end to their new round of sales.

Asghar Mir Mohammad Sadeqi, Central Bank official in charge of loans, said November 14 that one day before the car makers announced the new sales, the Central Bank had told them that it would only pay loans for cars already produced and stored, not any other car that would be produced later.