Small Share of Auto Part Manufacturers in New Joint-venture Auto Production Contracts

Khodrocar – Iran's auto industry have inked some contracts with their partners in the past couple months such as Renault and Peugeot. It seems that the share of auto part manufacturers, painters and body makers is decided to be about 40 percent. According to the pervious contracts, the real share of auto part manufacturers would be 15 to 20 percent.

Some whispers are saying that other automakers will come to Iran very soon and it means Iran's auto industry is moving fast toward producing foreign vehicles and this is a good news for the auto industry, also the role of auto part manufacturers would not be deniable in joint-venture products.

"The share of auto part manufacturers, painters and body makers is decided to be about 40 percent in the new contracts." Farhad Beh Nia, member of the Iran auto part manufacturers association said to Khodrocar reporter. "It is important to mention that the real share of auto part manufacturers has not been clarified in the contracts."

"At first we have to see if the auto part manufacturers can handle the costs and pay their debts to the auto makers or not? Then we can talk about the potentials of local auto part manufacturers and the investment in this field." He said.  "Iran National Standards Organization is not satisfied by the quality of local products and auto parts but we have to say that quality needs financial support. I think clarifying the price can solve this matter." 

"Wages are increased 36 percent and 46 percent during the past 3 years but nothing had changed in auto part manufacturing industry, so we are aspired to producing new vehicles as soon as possible. "He continued. "Automakers have to inform the auto part manufacturers at least seven months before starting the production, so auto part manufacturer has the time to produce the parts."

He also criticized the way of stopping vehicle production and said: "automakers must inform the auto part manufacturer before stopping the production of the specific vehicle. Otherwise, the auto part manufacturer will face great losses."

Khodrocar Reporter: Negar MirKarimi

Khodrocar Translator: Amin Zamani