Chevrolet, the 'Heartbeat of America,' not coming to Iran

DUBAI, United Arab Emirates – Chevrolet, the U.S. car brand once advertised as the "Heartbeat of America," won't be rolling new models through the streets of Iran anytime soon despite the recent lifting of sanctions under a nuclear deal with world powers.

Models from the General Motors Co. division have been struck off a list of allowed brands for the Iranian market after a speech last week by Supreme Leader Ayatollah Ali Khamenei criticizing American automobiles.

While GM itself said Wednesday it had no plans to enter Iran, the Islamic Republic remains a highly lucrative market of 80 million people largely untapped by Western companies. Already, the streets of Tehran are clogged with automobile traffic, much of it from its two manufacturers, though some are willing to pay the roughly 90-percent import duty for foreign brands.

As many as 200 Chevrolets worth $7 million were to be shipped to Iran from South Korea, according to a report carried by the semi-official Mehr news agency that later was republished by Iranian state television. It said Iran allowed in 24 Chevrolets in recent months.

But last week, as Khamenei gave a speech in Iran focusing on domestic industrial production, he criticized the American automobile industry, drawing chants of "Death to America!" for — surprisingly — his criticism of fuel consumption.

"The Americans themselves did not use American vehicles! This was reflected in the American press and we saw it," the ayatollah said, according to a transcript published on his website. "They used to say that they consume too much fuel and that they are heavy. Imagine that we use the vehicles ... (from) an American factory that is on the verge of bankruptcy."

The Mehr report said authorities struck the Chevrolets off the list of approved foreign cars that can be imported. BMW, Hyundai, Mercedes Benz, Toyota and others still can be imported — even Porsche's Macan luxury crossover utility vehicle, according to the list now available.

It wasn't clear from the Iranian reports whether the Chevrolets were being resold or coming directly from GM's factories in South Korea. Farah Amhaz, a spokeswoman for GM based in Dubai, said the Detroit-based manufacturer "is fully committed to complying with U.S. sanctions, including those that continue to prohibit most transactions with Iran."

"We have no plans to enter the Iranian market at this time and are taking appropriate steps to prevent local entities from importing GM vehicles into Iran," she said.

American cars were far more common in Iran before the 1979 Islamic Revolution, and are now a rare sight.

Today, Iran's automobile industry builds some 900,000 vehicles a year, though authorities hope to build 3 million annually by 2025. Over 90 percent of market share is controlled by two local companies: Iran Khodro, which assembles Peugeot-branded vehicles from kits, and SAIPA, which has made Citroens and Kias. Both manufacturers also build Renaults.

In the time since the nuclear deal, analysts have predicted the auto industry would grow if Iran's economy improves. However, the trickle-down effect of the accord has yet to be seen in the streets, as unemployment remains high.

Khamenei's remarks last week aren't the first to criticize the love of cars in Iran. In 2015, responding to two fatal high-speed car crashes, he criticized "some youth who are drunk with wealth" and "get into expensive and fashionable cars and mess around on the streets."

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Associated Press writer Amir Vahdat in Tehran, Iran, contributed to this report.

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