Currency Value Increment: What does it Bring on Part Makers?

Khodrocar – part makers are from the first and most important links of the long automobile industry’s chain who are paying the heavy price of the differential between the currency value and what it must be. Not only they provide their production line’s need with a more expensive currency, but also they receive nothing more than the contract from the car makers because the National Competition Council does not let car makers to increase their final prices over the products in response to the increment of currency value. The outcome is nothing but to get part makers closer to bankruptcy.

"Business needs a secured and stable atmosphere and when there are troubles, governmental businesses do not feel difficulties as much as the private sector companies do. Part making industry is key and strategic to automobile industry and that is why it is considered of great importance in all developed countries.” Said Reza Rezaei, a member of Iran Part Makers association.

"Part making industry was supported to some points of 2010, but afterwards, came along the sanctions with various troubles caused by it. Some sourced from foreign reasons and some from carelessness of the government such as conditions of the banks, applying difficult regulations, increment in price of energy, HR and customs tarrifs.” Said Rezaei.

"Yet the most important trouble was nothing but the major jump in price of the raw material used in part making process like has never accrued in any other countries. Price of raw materials like steel, aluminum, petrochemicals increased all together while they are all in possession of the government. At the same time the currency value exploded all of a sudden, caused serious aftermath on part making industry. There were various problems out there and the government was incapable of resolving them. All these troubles together brought the industry to the edge of the cliff.” Added Rezaei.

Referring to what government had promised about supporting the part making industry, added Rezaei: "The total vehicle production volume increased recently while the part making industry was wrestling with more daily losses. The part making industry had to keep going on because only a day off there could shut the whole automobile industry down. On the other hand increase of the production volume caused the increment of the losses. Not to many part making companies can handle the excess losses. This is not to question the government’s goodwill but the government was never united with what it said and what had done in practice, it is now time to take some proper action to save the art making industry.”

Khodrocar Journalist and Translator: Mostafa Anisi