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Iran Mercedes Production Delayed
Posted August 30, 2005 at 9:55 AM CST

Mercedes-Benz E-Class

If you're an Iranian government official and can't wait to get your hands on a shiny new E-Class built in your home country, you'll have to wait a little longer.  Production of the vehicles, which was supposed to begin in September, has now been delayed until winter due to contract related problems.

Mercedes, in cooperation with Iran Khodro Diesel, has invested $5 million euros to establish Mercedes-Benz Iran.  In recent months, 50 Mercedes-Benz vehicles have been imported to Iran, and due to rising oil prices, another 2,500 vehicles are predicted to arrive by March of 2006.  That number could even go up thanks to Hurricane Katrina.

Now, before I get thousands of emails saying this is completely unfounded, I ask you this - who in Iran really is buying these vehicles?  At first, I assumed maybe it had something to do with gas prices.  Iran has the second or third largest oil reserve in the world, so I figured their gas would be cheaper, which in turn would allow consumers to spend more.  Gas isn't only cheaper, it's much cheaper.  In July, gas in Iran was 40-cents a gallon.  That's because the gas price in Iran is fixed by the government.  But there's a catch.  Although gas is 40-cents a gallon, Iranians are still complaining that it's too expensive, because the per capita income of Iran is only $2,000.  Unless Mercedes is offering a new financing program I haven't heard about, I don't know anyone that can afford a Mercedes on $2,000 a year.  This once again begs the question - who in Iran really is buying the vehicles?  Yeah, you guessed it.  The government, that's who.  So next time you're at the pump, paying $2.89 a gallon, think of the nice Iranian government official driving the Mercedes you payed for.

That's my story and I'm sticking to it.

[Update: In this story, we state that the per capita income of Iran is $2,000. The actual per capita income is $8,000. Thanks Ali.]

Check out this Washington Post article for more information on Iran's economy and gas prices; it's pretty interesting.

For more information on Mercedes delaying production of the E-Class in Iran, click here.

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