Iran-based auto marketplace Bama.ir has launched Mashinchi.ir, an online-to-offline service for car sales with a 6,000 square-meter facility in Tehran. The service includes auto inspection, financing and used cars for sale on the premises.

Bama believes it has become a local pioneer in integrating offline and online transactions. “We are facilitating the car trade cycle in Iran by making it more transparent and safer,” Bama’s CEO, Amirali Shobeiry, told the AIM Group.

How does it work?

A car buyer can apply for car financing for a used car on Bama.ir by providing necessary documentation online. After a successful credit check, the car is delivered to Mashinchi by the seller for inspection. The vehicle goes through a full inspection process. An insurance company covers the inspection in case anything goes wrong during the process. Once the inspection is completed, the transaction can be finalized.

Shobeiry said it has been four years since they have been working on the idea of onsite inspections.

“It’s also a game-changing solution because in Iran in the past 40 years nothing innovative has come to the market,” he said.

Bama acquired Mashinchi from local entrepreneurs who started building the business two years ago.

“After they did all the quality testing, they invited us to see the whole setup. Since then, we have made a lot of changes to streamline the operation with Bama,” Shobeiry said. He did not reveal how much Bama paid for the business.

Boosting financing

With Mashinchi, Bama also wants to boost financing capability in Iran. Insufficient financial access is one of the main barriers to growth of the automotive industry in Iran, according to consultancy firm ILIA Corporation.

“In Iran, there is not a good mindset for this. We are trying to modernize the auto financing system,” Shobeiry said.

The auto marketplace has been working with different banks and leasing companies for years. The initial response of buyers to auto financing on Mashinchi has been encouraging so far, he said.

“We just did a soft launch. Even though we haven’t done any kind of advertisement except mentioning the Mashinchi banner on two or three pages on Bama, more than 200 enquiries have so far been opened up,” he added.

Iran has around 22 million cars on the streets, while three to four million used cars are sold annually.

The country has some significant bottlenecks to digitizing and streamlining car sales. For example, the government has three major centers in Tehran where buyers and sellers go to complete registration processes for used-car sales. The process can take up to four hours to finalize.

To overcome this, Bama has convinced state representatives to come directly to the Mashinchi facility and approve the registration process on the site. “This is another thing that has never happened in Iran,” Shobeiry said.

Bama takes a commission on the entire inspection and registration process via Mashinchi, which it has set at 1.5% of the vehicle’s sale price.

The pandemic impact

Bama.ir has been growing steadily over the past seven years. The site mostly competes with Divar.ir, Iran’s leading horizontal.

The Covid-19 pandemic hit the local automotive industry hard, primarily due to the exchange rate disparity.

Shobeiry said the economic sanctions imposed on Iran and not the pandemic cause the disparity.

“Every year we are beating the past year and it’s going pretty good,” he said. For the last two months, the market has been coming back to stability, he added.

Bama plans to have four to five Mashinchi branches with similar facilities in the capital city and immediately after that the coverage will be expanded nationwide.

“Quality has the primary importance for us,” said Shobeiry. “We are going to make sure that we are giving great quality in Tehran first. This is going to happen in the next six to eight months and then we are going to spread our wings.”

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