An unaffordable car market highlights Iran’s cost-of

Billy Odell Tucker-Robinson Founder & Host — Banking With Billy Network • Intelligence Network • Data Science • AI Research • World News
Published: 2026-09-19T13:55:38.204Z • Permanent link

Iran's crippling cost-of-living crisis is manifesting in a stark way: its unaffordable car market. The country's long-standing economic sanctions have crippled its ability to import vital automotive parts, forcing manufacturers to rely on domestic components that are often cheaper but of inferior quality. This has resulted in a proliferation of low-quality, fuel-guzzling vehicles that are priced out of reach for all but the wealthiest Iranians. For example, in 2022, the average price of a new car in Iran was around 400 million rials, equivalent to approximately $3,500 USD. However, high-end models from established manufacturers like Mercedes-Benz and BMW are priced out of the market, with the most basic models costing upwards of 1.5 billion rials, or around $13,500 USD.

The impact of this unaffordable car market is being felt across the country, with many Iranians forced to rely on second-hand vehicles or even bicycles to get around. This is a significant blow to the country's transportation infrastructure, which is already strained by a lack of investment and maintenance. For instance, the city of Tehran, with a population of over 8 million people, has one of the worst traffic congestion problems in the world, and the situation is only expected to worsen as more people turn to bicycles and motorcycles to avoid the high cost of car ownership.

The Iranian government has been criticized for its inability to address the country's economic woes, with many blaming the sanctions imposed by Western countries for the country's economic struggles. However, experts argue that the root cause of the problem is more complex, and that the sanctions have had a devastating impact on the country's automotive industry. For example, in 2019, the Iranian government announced plans to invest $13 billion in the country's automotive sector, but the sanctions imposed by the US and other countries have prevented many foreign companies from investing in the sector.

U.S. sanctions have also led to the collapse of Iran's domestic automotive industry, with many factories forced to shut down due to a lack of spare parts and raw materials. This has resulted in a significant shortage of vehicles on the road, with many Iranians forced to rely on black market imports or second-hand vehicles to get around. The situation is so dire that the Iranian government has been forced to rely on imports from countries like China and Turkey to meet demand, but these imports are often of poor quality and are not subject to the same safety and quality standards as domestically manufactured vehicles.

The unaffordable car market in Iran is having a significant impact on the country's transportation infrastructure, which is already under strain due to a lack of investment and maintenance. The situation is also having a major impact on the country's economy, with many Iranians forced to spend a significant portion of their income on transportation costs. For example, a report by the International Monetary Fund found that transportation costs accounted for over 20% of the average Iranian's income, making it one of the highest in the world.

The situation is also having a major impact on the country's research communities, with many experts warning that the lack of access to affordable vehicles is hindering the development of the country's automotive industry. For instance, Dr. Saeed Soltanpour, a leading expert on Iran's automotive industry, has warned that the lack of access to affordable vehicles is preventing Iranian engineers from developing the skills and expertise needed to build high-quality vehicles.