In Iran, 10% of annual expenditure on Chinese imports is allocated to car parts. Despite sanctions impacting trade, China remains a key supplier for Iran's automotive sector, producing over one million vehicles annually. However, in 2024, Iranian automakers faced challenges in maintaining parts supply, with imports from China dropping 43% to $653 million.
This decline led to a parts shortage, affecting private automakers who rely on Chinese complete knockdown kits. In contrast, state-owned manufacturers benefit from domestic parts production. The main issue stems from limited foreign currency access due to US sanctions affecting Iran's banking with China. This has not been resolved by increased Iranian oil exports to China, leaving companies struggling to obtain renminbi through Iran's Central Bank.
As the currency issue intensified, parts imports dwindled, hitting a low in September with $26 million worth of parts—a 65% decrease from the previous year. To counter this, Iranian automakers turned to the pistachio market, a sector not subject to secondary sanctions. By exporting pistachios to China, they generated foreign currency to facilitate car parts imports, with pistachio exports reaching $195 million in the last half of 2024, a 2.5-fold increase from 2023.
This shift has disrupted the pistachio trade, with traditional exporters facing competition from automakers. Pistachio exporters are negotiating with automakers to stabilize the market, intending to sell foreign currency at a mutually agreed rate under the Central Bank's oversight.
Source: Bourse & Bazaar