Challenges of Worn Out Heavy Duty Trucks Renovation
Worn out trucks are one of the main reason for air pollution in Iran and the government have decided to renovate this vehicles with facilitations.
Khodrocar – Worn out truck include 23 percent of air pollutants in Iran and they are really a big trouble.
Currently, there are 800 thousand heavy duty trucks exist in Iran and 202 thousand of them have already worn out. Considering this issue, the government is going to pay 3 billion and 200 million IRRs to the customers with 9 percent profit in order to renovate their worn out vehicles.
What are the challenges for implementing this plan?
Hassan Karimi Sanjari, an automotive industry expert tells Khodrocar regarding the issue: "202 thousand worn out heavy duty trucks exist in the country which their fuel consumption is much higher than a new one. By renovating these vehicles, we can save 5 billion dollars.”
Hassan Karimi Sanjari, an automotive industry expert tells Khodrocar regarding the issue: "202 thousand worn out heavy duty trucks exist in the country which their fuel consumption is much higher than a new one. By renovating these vehicles, we can save 5 billion dollars.”
According to government’s plan, a loan equivalent to 70 percent of the price of any vehicle will be given to the buyer as facilities with 9 percent profit.
However, few challenges exist for implementing this plan.
Downturn
Karimi Sanjari says: "Trucks are used for a certain purposes. They are used for work but now, due to the reduction of development budgets, in the field of housing, business and mines, Iran is experiencing a downturn. These vehicles are used for these kinds of fields and if the downturn remains, a huge proportion of demand for these cars will be destroyed.”
However, few challenges exist for implementing this plan.
Downturn
Karimi Sanjari says: "Trucks are used for a certain purposes. They are used for work but now, due to the reduction of development budgets, in the field of housing, business and mines, Iran is experiencing a downturn. These vehicles are used for these kinds of fields and if the downturn remains, a huge proportion of demand for these cars will be destroyed.”
He believes that there is no guarantee for the customer that if he purchase a new truck, he could return the loan to the government.
Allocation of Budget
The automotive industry expert tells Khodrocar: "The government must allocate a certain budget to this plan. Implementing this plan need an initial fund approximately about four to five billion dollars. In addition they must allocate a budget for their foreign partners because this industry in very depended to them.”
Joint Ventures
After the Iran Nuclear Deal, few joint ventures have been inked between Iranian and foreign partners in order to make heavy-duty trucks but the process is very slow or completely paused.
Hasan Karimi Sanjari believes that there is no motivation for foreigners because there is no facilitations for them. They deny entering Iran’s market.
Big Trouble Called Sanctions
The renovation of worn-out trucks requires the cooperation of Iranian companies with foreign partners, but sanctions as well as the country's political conditions may be a major obstacle to this.
Allocation of Budget
The automotive industry expert tells Khodrocar: "The government must allocate a certain budget to this plan. Implementing this plan need an initial fund approximately about four to five billion dollars. In addition they must allocate a budget for their foreign partners because this industry in very depended to them.”
Joint Ventures
After the Iran Nuclear Deal, few joint ventures have been inked between Iranian and foreign partners in order to make heavy-duty trucks but the process is very slow or completely paused.
Hasan Karimi Sanjari believes that there is no motivation for foreigners because there is no facilitations for them. They deny entering Iran’s market.
Big Trouble Called Sanctions
The renovation of worn-out trucks requires the cooperation of Iranian companies with foreign partners, but sanctions as well as the country's political conditions may be a major obstacle to this.
Nader Vahab Aghaei, an automotive industry expert explains: "It a bad time for implementing this plan because of political reasons and sanctions. The partners do not have enough reasons to enter Iran’s market.”
He emphasizes: "Exchange rate fluctuations and people purchasing power are another problems for this plan. Considering the current economic situation, this plan does not have a bright future.”
Khodrocar – This plan does not seem easy and the government have many challenges to face. Let’s see what they can do about it.
He emphasizes: "Exchange rate fluctuations and people purchasing power are another problems for this plan. Considering the current economic situation, this plan does not have a bright future.”
Khodrocar – This plan does not seem easy and the government have many challenges to face. Let’s see what they can do about it.
Khodrocar Reporter and Translator: Maziyar Jafarieh
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