In the last fiscal year that ended March 20, a total of 900,714 passenger vehicles were produced in Iran, indicating a 4.33% rise year-on-year.
According to data published on the website of Iran Securities and Exchange Organization or Codal.ir, Iran produced 37,451 more cars compared to the year before. No data have been released on commercial vehicle production.
Iran Khodro (IKCO), the country’s leading automotive company, produced 480,338 cars, indicating a 21.97% YOY increase. The figure is 86,416 higher than the previous year’s output.
Peugeot models had the lion’s share with 346,575 cars in 11 months. Samand was IKCO’s second most popular model with 55,220 units.
Besides passenger vehicles, IKCO manufactures commercial vehicles, including vans, pickups, trucks and buses. However, during the period under review, IKCO halted the production lines of several models of commercial vehicles.
The firm’s arch-rival SAIPA produced 317,321 vehicles during the year, marking a 12.67% year-on-year decline. The figure was 46,058 higher in the year before.
Tiba and Pride models topped the company’s production chart with 236,939 and 50,413 units respectively.
Pars Khodro registered a 2.84% decline, producing 103,055 vehicles. Last year, the company produced 106,072 vehicles.
Month-on-month comparisons also show that the three automakers produced 83,645 cars during the month ending March 20, registering a 132.65% rise compared to the year-ago period.
IKCO produced 48,332 passenger vehicles in the month, registering a 34.43% decrease compared with the same period of last year.
SAIPA’s output shrank to 7,586 vehicles, a drastic 68% less than the year-ago month.
Pars Khodro also produced 9,212 vehicles in the last month of the previous year, recording a slight 0.95% fall year-on-year.
The automakers had decided to expand output by 50% to 1.3 million cars by the end of last fiscal year, which means around 400,000 more than their annual record.
Mismanagement and the pressure of US sanctions, now coupled with the Covid-19 outbreak, have derailed Iran’s auto industries.
However, the state has stepped in to streamline the sector and cut its reliance on foreign resources. Industry insiders have optimistically set the current year’s auto output goal at 1.25 million cars.
During last year, IKCO and SAIPA have forged ties with knowledge-based entities to indigenize auto electronic parts in the hope of improving the quality and quantity of their output.
Officials are optimistic that the automakers will meet the goal this year.
Slashing Capital Flight
In December 2020, Farshad Moqimi, CEO of IKCO, said his company has prevented the capital flight of $138 million through the localization of vehicle parts in the first eight months of the last Iranian year (March 20–Nov. 20, 2020). He maintained that this was achieved, thanks to the support of industrial units affiliated with the Defense Ministry and knowledge-based companies.
“Several projects have been launched to gradually slash capital flight caused by auto parts imports, which can annually reach $248 million,” he added.
Moqimi noted that the projects are curbing production costs and reducing IKCO’s annual import bill by $180 million while the company used to spend $360 million on the import of parts every year.
He called on banks to extend support to domestic parts makers for upgrading their machinery and urged related authorities to cut their tax rates.
“Encouraging local parts makers to manufacture high-tech imported components is on IKCO’s agenda,” he said.
Moqimi signed an agreement with Shiraz Electronic Industries Organization and its partners in late December to develop electronic components for IKCO’s vehicles.
According to Mohammad Mehdi Izadi, the head of the organization, the agreement envisages the design and production of automotive electromechanical modules.
The automaker says the organization will soon become one of its largest auto part suppliers.
SAIPA’s Endeavors
In late November 2020, SAIPA announced that it is implementing 81 projects to localize high-tech auto parts for curbing the sector’s dependency on foreign resources.
Based on the automaker’s website Saipanews.com, these projects have been devised in collaboration with the Defense Ministry, Aerospace Force of the Islamic Revolution Guards Corps and the Iranian Army’s Air Force.
Daryoush Golmohammadi, SAIPA’s deputy for strategic planning, said 28 joint ventures are being implemented along with industrial units, affiliated to Defense Ministry.
“So far, seven sophisticated electronic car components have been localized and are ready for mass production,” he said.
Golmohammadi noted that SAIPA is producing 26 advanced parts with the help of IRGC’s Aerospace Force.
“The production of these parts is undergoing tests and will enter the production line, as soon as the prototypes are tested and verified,” he said.
The army’s Air Force is also cooperating with the automaker in 27 other localization projects, which the official said are in the design phase.
The targeted auto parts, which used to be imported, include Engine Control Unit, modulator, injector, airbag, multimedia system, DC engines, electric sensors and digital ammeter.
“With the local production of these components, SAIPA can curb capital flight by up to €94 million annually,” Golmohammadi `said.
The automaker is also in talks with the Defense Ministry for the joint production of GPS and radar systems for electric vehicles.
