Supportive Tariffs would Help Part Makers?

Khodrocar – since the beginning of Iranian New Year, auto part importation statistics reveled one after another and everyone found out about the hard days of part manufacturers. These stats are showing all problems that part manufacturers faced with during the last year.

These problems happened while the last year was "economy of resistance: production and employment” also there was emphasize on supporting domestic products but part manufacturers got forgotten and some of them didn’t have shares from auto contracts.

Recently, Asghar Khosro Shahi, consultant of ministry of Industry, Mine and Trade announced that they are working on a plan to change the part importation tariffs because current tariffs doesn’t support the local production well.  He said that right now, most of part production in these days belongs to IKCO and SAIPA but share of part manufacturing for Chinese cars is low and they mostly imported as CKD.

Now, the question is what reasons are reducing part manufacturers’ motivation for working in this market?

"Manufacturers who work with exchange harmed more from economy changes. There are lots of part manufacturers who import Chinese parts and inject it to the market in the name of local products.” Bahram Shahriari, an expert of auto industry told Khodrocar reporter.

"Part manufacturers and auto makers are getting along with dollar price increment but they are not allowed to increase their prices therefore, part manufacturers are getting confused. Upgrading part production share from 25 would happen but it’s for glass, battery and tires which are not auto parts or first materials.” He said.

"Tariffs should be supportive, for instance WTO increased the steel tariffs to prevent steel importation. Now it seems that supportive tariffs could be a cure for the current situation of part makers. Increasing tariffs may have positive effects on part industry.” He added.

A look at published statistics of local production and part importation from China is making the question that what does high amount of importation means? Are these importations a sign of local production reduction or it shows the full CKD importation? Does Chinese abusing the current situation to impose their parts on Iran’s market?

Khodrocar Reporter: Negar Mir Karimi

Khodrocar Translator: Amin Zamani