Iranian, Chinese cars rev up in sanctioned Syria

Iranian, Chinese cars rev up in sanctioned Syria ... 02/03/2019 Auto

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A Tehran-based automaker and a colorful assortment of other low-cost imports dominate the market
BySami Moubayed, Damascus
A car is pictured on a production line at the joint Syrian-Iranian car manufacturing plant Siamco, in Damascus. Photo: Mikhail Voskresenskiy / Sputnik

* * * In December, a video of a Syrian man presenting his girlfriend with a brand-new yellow Camaro convertible in the middle of Ummayad Square in central Damascus went viral on social media. But the flashy romantic gesture, involving a conspicuous American car model, soon gained the attention of the authorities and turned into a nightmare for the couple. The car had been stolen, likely smuggled through northeastern Syria, and its license plate altered, leading to its confiscation and the arrest of the man. Authorities were tipped off by two clues. One was that it was an American car, the second being its year of production: 2016.
“There are no brand-new cars in Syria – certainly no American ones,” laughed Abu Hekmat, a famous car dealer in the neighborhood of Barzeh, north of the capital.
“The fact that it was an American car also aroused immediate suspicion,” he told Asia Times, adding: “The only new American cars that we have are those smuggled from territories where the Americans are based [east of the Euphrates River].” In cities like Hassakeh and Qamishly, currently in the hands of US-backed Kurdish militias, 2018 models are all over the place, mostly Chevrolets, Range Rovers, and Ford SUVs and cars.
Due to US-led sanctions, however, the last shipment of modern cars that came to Damascus was in late 2011. The showrooms that once looped around the town of Harasta on the outskirts of Damascus were later torched or destroyed in the crossfire of fighting. Government troops regained control of the area earlier this year, but not a single showroom has re-opened because international carmakers stopped doing business with Syria.
In their absence, Asian carmakers have stepped into the fray, most notably from Iran and China.
Made in Iran
Before the outbreak of the Syrian civil war in 2011, an experimental new Iranian-made car garnered scant interest among the Syrian populace. The “Sham,” a joint venture between the Syrian and Iranian governments, sold for 725,000-875,000 Syrian pounds ($14,500-$17,550), a competitive price at the time. But most Syrians preferred Western brands, and so the car did very poorly in Damascus.
Syrians were similarly unenthusiastic about Peugeots, locally assembled by Iran Khodro, the same Iranian company behind the Sham.
In recent years, however, Syrians looking to purchase a new vehicle have found themselves with no other choices. And they are not getting a deal.
Due to the sharp devaluation of the Syrian pound, the Sham now sells for 8-9 million SP. When converted to dollars, that means the price has come down more than $2,000 since the war broke out. But the Syrian population makes its living in local currency, making even this car unaffordable to many.
A full-option Iranian-made Peugeot 206 also sells for around $12,000, with 407s selling for $14-15,000.
These Iranian-made cars are affordable only for the shrinking middle class, too expensive for the poor and too cheap for the moneyed elite, who would “rather drive a 2003 Audi A4 than a brand-new Iranian Peugeot,” according to Abu Ramez, another car dealer, based on Baghdad Street in central Damascus.
A used full-option Audi A4 or Nissan Murano costs anywhere between 8-11 million SP, making them almost equal in price to new Iranian cars.
Should the Iranian models rise in popularity, it will likely be only because they are the only show in town for most Syrians.
“Over the past five years, we sold around 50 Iranian Peugeots… and around 25 Sham Cars,” said Abu Ramez. When compared with secondhand European cars, however, the sale of these cars is “not that bad,” the dealer said.
“The European cars amounted to 10-15 sales only, simply because they have no dealers in Syria anymore. People prefer going for cars that have dealers in Syria — like the Chinese. Fixing an Audi or a Volkswagen requires a trip into Lebanon, which makes it very expensive.”
The longer the sanctions drag on, the more difficult maintenance of a European car becomes.
China trumps Russia
Despite the presence of thousands of Russian troops in government territory, it is the Chinese manufacturers that have had the most success filling the gap left by Western brands.
The only popular Russian car model is the Lada, mainly driven by taxi drivers.
“Their selling price is 3-4 million SP ($6-8,000) but they face strong competition from their allies, the Chinese Geely car.” Although Geely cars sell for double the price, they are presently overrunning the taxi industry in cities like Damascus and Aleppo.
The small, manual Russian Oka cars, once the pride of the former Soviet Union, are also facing stiff competition from Chinese models like Brilliance and BYD.
“[The Okas] are among the cheapest in Syria” said Riad Khoja, an Oka dealer who sells the cars for 2.5 million SP ($5,000). Khoja notes that his entire stock was imported by private Syrian businessmen. “Not a single one came into the market with the Russians.”
What do Russians prefer to drive in Syria? “They drive Audis,” chuckled the dealer Abu Hekmat from Barzeh.
The Chinese Brilliance sedan, modeled after the BMW, is the high-end product of Syria’s Asian ally, matched only by the BYD Tang SUV.
“Brilliance cars look good, and are safe to drive,” said Abu Ramez. New arrivals are in great demand, especially from middle-income households who like the low maintenance costs.
The Chinese BYDs, which entered the market just two years ago, “are very popular, because they look exactly like the Audi Q5.” The current selling price is 19 million SP ($38,000) – the highest of all in the non-American, non-European market.
False alarms
The car market has in recent years seen a number of false alarms, with promised domestic models and prospects for more varied makers falling through.
In early 2017, authorities announced that they were preparing to launch a car called “Syrians” that would be affordable to government employees in monthly installments through state-run banks.
That car, marketed for its sophisticated dashboard and automatic gearbox, was fixed at 8 million SP (approximately $17,000 at the time). The project never got past the drawing board due to shifting battlefield priorities for both Syria and Iran, topped with fresh US sanctions earlier this month.
In mid-2018, a Kia showroom emerged on the Mezzeh highway in Damascus, not far from a Chinese outlet.
This raised speculation that the well-respected South Korean giant was returning to Syria. It was soon explained, however, that those cars were not coming directly from South Korea but in bits and pieces from neighboring Arab countries to be assembled and sold in Damascus, thus averting sanctions on the import of new automobiles.
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