Tires produced in the first four months of the current fiscal year (March 21-July 22) have increased in terms of number but declined with regard to tonnage.
Domestic tire manufacturing companies produced 8.15 million tires during the period, registering a 1% growth compared with the corresponding period of last year, IRNA reported.
In terms of tonnage, tire output hit 86,243 tons of tires, marking a 2% decrease year-on-year.
By the end of the fourth fiscal month, 53,266 tons of passenger car tires were produced, showing a 6% growth YOY. They accounted for 61.7% of the tire manufacturers’ total output during the four months.
A total of 8,125 tons of van tires were produced during the period, which indicate an 11% YOY decline.
A total of 16,980 tons of heavy duty and commercial truck and bus tires were produced, registering a 10% decrease YOY.
Agricultural tires reached 6,509 tons during the period, down 17% YOY.
Also, construction and industrial tires’ production hit 1,363 tons, registering a 17% decline YOY.
Bicycle and motorcycle tires hit 6,044 tons in the first four months of fiscal 2022-23, marking a 7% growth YOY. By including these tires, the total domestic output reached 14.99 million tires weighing 95,172 tons in the four months ending July 22.
The production of inner tubes reached 2,885 tons during the period, down 8% YOY.
Domestic tire manufacturers produced 863,785 flaps, conveyor belts, hoses and other related products weighing 2,039 tons during the period.
The tire industry has been active in Iran for 60 years. Currently, 11 domestic tire companies are manufacturing tires for passenger cars, trucks, buses, vans, construction and agricultural equipment, as well as bicycles, motorcycles and inner tubes for tires.
About 15,000 people are employed directly and more than 250,000 people are working indirectly in the Iranian tire industry.
Smuggling of Car Tires Abetted by Import Obstacles
Due to a lack of authorized car tire import, the smuggling of tires is rampant, according to the secretary of Iran Tire Importers Association.
“If the government were to modify the current conditions and make it possible to import passenger car tires, it will be in the interest of both consumers and the government,” Mohammad Mir-Abedini was also quoted as saying by Khabar Khodro.
Currently, it is possible to import heavy vehicle tires, but due to foreign exchange obstacles, it is not possible to import car tires.
“The import of heavy vehicle tires is being carried out as per the needs, but the official import of passenger car tires is not possible due to fluctuations in the foreign exchange rate’s base price and the overall rise in the price of passenger tires,” he said.
The secretary of Iran Tire Importers Association noted that because of the reduction of customs duties and taxes, the import tariff for heavy and light tires has been reduced, and the tariff for passenger tires has decreased from 40% to 32%.
“However, due to the change in the exchange rate from subsidized currency [$1=42,000 rials] to Nima currency [$1=260,000 rials], and as a result of the 25-30% rise in the price of passenger tires, it is not possible to import from official sources,” he added.
In the Nima system, importers declare their currency needs, exporters register their currency proceeds and banks and authorized moneychangers act as dealers. As per the rules, non-oil exporters have to repatriate a portion of their foreign exchange earnings and sell it via Nima. They can also sell their currency to authorized exchange shops.
Referring to challenges facing tire importers, Mir-Abedini said, “The sample test by the Iranian National Standards Organization, the cost of tire clearance and value-added tax have imposed a heavy burden on traders.”
Auto Spare Parts Top Contraband
Automotive spare parts topped the list of smuggled goods in the fiscal 2021-22 (ended March 20), according to Spokesman of the Headquarters to Combat Smuggling of Goods and Foreign Exchange Hamid Reza Dehqani-Nia.
He announced that $17.1 billion worth of smuggled goods entered the country in the fiscal 2020-21.
The spokesman noted that after car spare parts, food was the second largest category of contraband last year, while computer equipment and home appliances respectively ranked third and fourth in the fiscal 2021-22, the news portal of Iran’s Chamber of Commerce, Industries, Mines and Agriculture reported.
According to Dehqani-Nia, many household appliances in the Iranian market are counterfeit.
"These products are Iranian goods fabricated or repaired in unofficial workshops and sold in the domestic market as foreign and banned brands," he said, without mentioning the value of smuggled car spare parts.
Mohammad Reza Najafi-Manesh, a member of the Tehran Chamber of Commerce, Industries, Mines and Agriculture and chairman of the Association of Homogeneous Propulsion Industries and Component Manufacturers, said although car spare parts topped the list of smuggled goods, it is not clear how much was smuggled into the country and how many were produced by unofficial domestic units.
“In other words, if a product is found to be illegal, it may have been smuggled into the country, or illegally produced by unlicensed units inside the country,” he added.
Najafi-Manesh noted that another problem is that the size of the spare parts market in Iran is not known.
“Therefore, it was decided that ISACO, SAIPA Yadak and the Association of Homogeneous Propulsion Industries and Component Manufacturers cooperate to survey the spare parts market and determine how much of it is domestic and what percentage comprises counterfeit production and smuggling,” he added.
In the field of auto parts, domestic car batteries and tires were obliged to have ID and tracking codes, and it was decided that 55 other commodities produced by 173 domestic companies would receive ID and tracking codes.
Najafi-Manesh noted that Iran has 1,500 car component and spare parts producers.
