Currency Tensions: New Problems for Motorcycle Manufacturers’ Parts Clearance

Khodrocar – From the beginning of this year, motorcycle manufacturers forced to produce "Euro 4 injector” products. They were banned from producing and plating their products. After many correspondences, they have succeed to earn a 10 month deadline in order to produce euro4 motorcycles. Four months after the deadline, Iranian Traffic Police allowed the companies to produce euro 3 injector motorcycles again until March, 2019.

This time, the motorcycle manufacturers trying to produce euro4 products, faced a new challenge: Currency tensions and new government’s currency pack. They are on the brink of bankruptcy. Supplying the parts needed for motorcycle production has become difficult due to rising prices for materials and on the other hand, the companies’ products, which they registered earlier are now on the customs and due to the currency problems, they are unable to clear the goods.

Bahman Zia, the secretary of Motorcycle Manufacturers Forum tells Khodrocar regarding the problem: "Companies are unable to clear their goods from customs because of currency differentiation. This has hit the supply side of the market.”

He tells about the motorcycles’ price increments: "Despite the rising prices of foreign exchange, raw materials and production costs, manufacturers also can not set prices and have not been able to increase the price of their products or the increments were not remarkable. Apart from increasing the cost of engine supplies from foreign sources, domestic parts have increased by 20-30 percent and some of them even by 50 percent.”

He believes that the market doesn’t have lack of motorcycle supply because the demand and supply are approximately even.

He says: "The status of the currency and the payment of the exchange difference must be specified to clear the parts and stabilize the market.”

On the other hand, despite the fact that the production of carburetor motorcycles in Iran has stopped and their plating is no longer done, these days it seems that the purchase and sale of these motorcycles has increased and they returned to the consumption cycle. Zia tells Khodrocar in this regard: "This issue not only applies for the carburetor motor but also applies for second-hand old injector motorcycles and it is the result of wrong decisions. Unfortunately, the boom of the second-hand motorcycle market also increases the pollution of the air. The government was looking to decrease the air pollution but wrong decisions had an opposite result.”

Khodorcar – Some companies have become bankrupt due to the currency tensions. Now, the government must think about preventing remaining companies from bankruptcy instead of forcing them to produce euro 4 injector motorcycles, which match new global standards.


Khodrocar Reporter: Sepide Ghazinejad
Khodrocar Translator: Maziyar Jafarieh