The Stem of Automobile Industry’s Difficulties

KhodroCar - Iran's 20-Year Vision Plan contains various plans as 50 percent production of light duty vehicles, providing at least 25 billion dollars’ worth of car parts by domestic car part producers, 6 billion dollars’ worth of car part exportation along with plans to create the infrastructures of vehicle production and so on.

Such statistics requires a way more precise planning and experts believe that the plans are not yet clear.

"Plans for automotive industry’s expansions are not yet clear, although there are rules out there. Automotive industry is the only industry set with rules but they are not obeyed and are changed under so many regulations all the time.” Said Bahram Shahriyari, automotive expert to KhodroCar.

He believes that the automotive problems are from the shallow decision makings in this industry. The domestic car market is lost right when people see all possible variety of vehicles, People are tired of Pride.

"Before Chinese entering Iran car market, vehicle import was limited to some expensive vehicles only, not interfering with domestic car market. But Chinese brought with them the same vehicle segments produced in Iran and that is why the domestic car market is lost now”. Added Shariyari.

He mentioned it is better to give Half-Governmental companies to the Private Sector companies so they could be used as an opportunity to promote the industry.

In answer to the question, is importing colorful segments of vehicles a way to set a competition in domestic automotive industry, Shahriyari emphasized: "No, and that is because of various reasons. The first reason is the low figure of vehicle production, before Ahmadinejad the annual vehicle production figure 1.6 million units. After him it dropped drastically and now it is around 600 thousand units a year and that is for 17 car makers which is not reasonable.”

"Car part industry is not in great shape as well. Most parts are imported and those that are being produced domestically are by to many part producers.” He added.

"Second reason is the raw material. The raw material used by Chinese in their automotive industry are not processed so that increases their value added.” Continued Shahriyari.

The expert mentions wages in Iran as the third reason. Great number of employees in car companies causes the final value of the vehicle to increase. Taxes, bank profits and other things cause some major differences in the final pricings of vehicles so they are not worthwhile to be produced. Major politics are not formulated for automotive industry.