Iran has launched a tech center specialized in auto parts production to speed up localization efforts in the automotive industry and thwart the limiting effects of US sanction.
Vice Presidential Office for Science and Technology, in collaboration with Iran’s auto parts maker Crouse Company, has invested €3 million in the tech center, SNN reported.
It has been awhile since the innovation center became operational, but it was officially inaugurated by Vice President Sorena Sattari on Saturday.
Based near Tehran and spread over 2,500 square meters, the center has absorbed 250 professionals and 30 university students of different majors who are working on over 120 tech projects related to automotive and parts industry.
Tech units at the center have so far designed three types of central control units, an airbag system and numerous electronic components. Work is also on track for the design of radar and navigation systems.
Speaking at the inauguration event, Sattari said innovation in design, optimization and development are the most prominent criteria for turning the domestic auto industry into a dynamic sector, which cannot be realized unless the growing technology ecosystem is involved.
“Knowledge-based companies can produce a noticeable share of car components. Major automakers and industry insiders should forge ties with these companies to grow and move away from imports toward self-sufficiency,” he added.
Sattari also invited automotive tech aficionados and knowledge-based units to help the sector develop.
With 12,800 employees, Crouse uses the most advanced measuring and designing equipment to produce a wide range of auto parts, including sensors, indicator lights, spool handles, suspension and brake switches, decorative parts, engine parts, car control systems, air-conditioning systems, steering components and safety parts.
In the company’s research and development center, over 230 researchers are working on projects jointly with major academic centers to ensure the scientific credibility of their designs and products.
Indigenization Efforts
In a similar move in July 2020, a knowledge-based company produced several high-tech auto parts that meet global standards, which has been hailed by industry insiders as a step toward localization of auto parts.
According to the Vice Presidential Office for Science and Technology, Iran Spare Parts Company, a major manufacturer of auto components, announced it has produced crankshaft pulley, rubber bush, plastic bush, engine handle, hydro mount and balance shaft using state-of-the-art technologies.
The components used in the production of several car models are in high demand.
Reza Aryana, the CEO of ISPC, said the parts have a coating that makes them resistant to rust and corrosion.
Noting that various engineering methods are employed to designing these parts, Aryana said ISPC’s production is supervised by professionals and quality control units to enforce the latest global standards and meet the requirements of domestic automakers.
“The company’s products are compatible with foreign samples,” he said, adding that the mass production of tech-based auto parts can curb the sector’s dependency on foreign resources and prevent capital flight.
Slashing Capital Flight
In December 2020, Farshad Moqimi, CEO of IKCO, said his company has curbed capital flight to the tune of $138 million through the localization of vehicle parts in the first eight months of the current Iranian year (March 20–Nov. 20, 2020). He maintained that this is achievable, 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 amount can reach $248 million per year,” 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 the banks to extend support to domestic parts makers for upgrading their machinery and asked relevant authorities to cut their tax rates.
“Encouraging local parts makers for manufacturing 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 vehicles.
According to Mohammad Mehdi Izadi, the head of the organization, the agreement envisages the design and production of automobile electromechanical modules.
The automaker says the organization will soon become one of its largest auto part suppliers.
SAIPA’s Attempts
In late November 2020, SAIPA announced that it is implementing 81 projects to localize high-tech auto parts, hoping to curb the sector’s dependency on foreign resources.
Based on the automaker’s website Saipanews.com, the projects have been established 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 hi-tech parts with the help of IRGC’s Aerospace Force.
“The production of these items 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 negotiating with the ministry for the joint production of GPS and radar systems for electric vehicles.
