Cars made by Volkswagen’s wholly owned Czech subsidiary Skoda are set to re-appear on Iran’s auto market after a four-decade hiatus.

Five Skoda models are slated for Iranian showrooms following a revision of the Islamic Republic’s car import regulations to allow imports of both used and new cars, Asbe Bokhar magazine reported on July 16.

It is unclear, however, whether Skoda has any connection at all to the brand’s Iran return. Skoda was yet to respond to bne IntelliNews’ questions on the matter emailed to the company on July 16.

One question is whether sales of new Skoda models on the Iranian market could breach US sanctions. In an FAQs section on the website of the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury, the following, dated August 6, 2018, is written: “Is the sale, supply, or transfer of finished vehicles or ‘auto kits’ to Iran sanctionable under the New E.O. [presidential executive order]?

“E.O. 13846 does not make sanctionable the export of finished vehicles to Iran if no further assembly or manufacturing is required. As such, exporting fully assembled and finished vehicles to Iran for sale would not be sanctionable, so long as the transaction is consistent with U.S. sanctions, including that it does not involve a sanctioned person.

“In contrast, ‘auto kits’ (or ‘knock-down kits’) exported to Iran for assembly in Iran would be considered goods or services used in connection with the automotive sector of Iran and the export of such kits to Iran would be sanctionable if the transaction is ‘significant.’ (See FAQ 289 for an interpretation of the term ‘significant.’).”

The Skoda models purportedly set to become available to Iranian car buyers are the Karoq, Octavia Sedan, Scala Station Wagon, Kamiq Crossover and the Kushaq, a crossover exclusively manufactured in India.

Iran Rover is to serve as the dealership for Skoda sales in Iran, with fellow Iranian company Pars Sater Houshmand Co, the importer, according to various Persian-language Iranian media reports.

The Raisi administration’s decision to overhaul the car import rules amounts to its latest bid to control runaway domestic vehicle prices amid headline inflation unofficially thought to be running at around 60% and a lack of cars produced for the market. The move was sanctioned on July 15 by the top legislative body, the Guardian Council.

Until recently, Iran levied significant tariffs on imported cars, with imports of luxury cars, or those costing more than $25,000, officially banned.

Skoda in the past had an official showroom on Tehran’s Taleqani street. Its logo is still present on the old “VaSkoda” showroom.

Video of launch event: