Domestic auto-manufacturers which plan to expand their cooperation with Chinese partners are likely to suffer loss, an auto part expert said on Saturday.
Local production costs of Chinese and European cars do not vastly differ and Iranian buyers obviously prefer European brands over Chinese, said the secretary of Auto Part Manufacturers Organization, Arash Mohebbinejad, as reported by IRNA.
Domestic auto manufacturers should recognize that long-term cooperation with Chinese companies is not sustainable, specifically when western imposed sanctions against Iran over its nuclear energy program are lifted.
After a framework nuclear agreement was clinched in April, Iran and the P5+1 (the United States, Britain, France, Russia, China and Germany) are now negotiating once more to hammer out the details of a final agreement by a self-imposed June 30 deadline. Problems hindering domestic manufacturing, however, are not limited to the sanctions, Mohebbinejad said. "Clearly, not all troubles in the sector will disappear once sanctions are lifted."
Besides the sanctions, there is the issue of financing. As the rial has deeply depreciated against the US dollar in recent years, manufacturers' purchasing power and their cash flow have decreased, the expert noted. "To boost the manufacturing sector, we need fresh financial resources so that dilapidated infrastructure can be renewed." Also, he added, "the sector must further benefit from contemporary global science and technology."
