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Tough Times Ahead for Iran Auto Parts Makers

According to a business insider, Iran’s auto parts industry has fallen into stagnation due to soaring foreign exchange rates that make it almost impossible to secure key auto parts through imports
Tough Times Ahead for Iran Auto Parts MakersTough Times Ahead for Iran Auto Parts Makers

Iran’s auto part production sector is having a hard time procuring the raw material and key parts from foreign sources due to the restrictive US sanctions, an industry insider said.
Mohsen Razmkhah added that the industry has fallen into stagnation due to soaring foreign exchange rates that make it almost impossible to secure key auto parts through imports, ISNA reported.
Since the summer of 2018 when the US sanctions were reimposed against Iran, the rial has lost about two-thirds of its value and prices of almost all goods have soared to unprecedented highs. The greenback was trading at 233,000 rials in Tehran on Monday, though it hardly fetched 42,000 rials a year earlier.
Criticizing the state’s inefficient management of the ailing sector, Razmkhah said, “The loans so far allocated to the industry have acted more as temporary sedatives.”
Borrowings cannot solve the underlying issues of auto parts manufacturers and an effective strategy is required to revive the industry, he added.
Presenting a more optimistic perspective, Abdolvahab Sahlabadi, the head of the House of Industry, Mine and Trade of Iran, affiliated to the namesake ministry, said automotive companies are in direct contact with parts makers, so they should establish efficient collaboration to overcome the current economic headwinds.

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