Solving the challenges of the automotive industry depends on the correct understanding of the prevailing situation, according to a member of the Majlis Industries and Mines Commission.
“Currently, the huge difference between supply and real market demand is one of the main challenges, although part of this demand is due to the difference between the factory price and the unstable open market rate,” Reza Taqipour Anvari told Khabar Khodro.
The official noted that market regulation and price management will help eliminate the false demand.
“Currently, domestic car production is able to cover a maximum of 50% of the market demand and special measures must be considered in this regard,” he added, stressing that the country's car market requires 1.6-2 million vehicles.
Anvari stated that increasing car production and permitting imports in accordance with Article 4 of Automotive Industry Regulations can be among solutions to meet the market demand.
“Article 4 of Automotive Industry Regulations, which allows the conditional import of automobiles, is a license for the government to regulate the market and an incentive for the export of parts and services,” he said.
He criticized the government’s direct management and control over car production and called on the government to withdraw from this industry and create a competitive ambience.
“Some of the automakers' shares are now listed on the stock exchange and some are owned by various other sectors, which must be managed within the framework of private sector regulations and commercial law,” he said.
“Competition will be very effective in improving the quality, increasing production and regulating price.
Anvari emphasized that conditions must be streamlined in a way that motivates automakers.
“Of course, factors beyond the control of automakers, such as economic stability and the exchange rate, are also influential and I hope we will see stability as a result of the nuclear negotiations,” he said.
The official advised car manufacturers to consider the likely revival of the Joint Comprehensive Plan of Action, (following the talks that are underway between Iran ans six world powers in increase customer satisfaction.
Anvari noted that if the quality of domestic cars were on par with that of foreign cars, they will have an edge because of the access to after-sales service, cheaper parts and services.
Vehicle Import Tariffs Unchanged
Vehicle import tariffs will remain unchanged in the current fiscal year (started March 21), a deputy minister of industries, mining and trade said.
“The tariff of vehicles that are to be imported in the fiscal 2022-23 will not change and is based on the same previous tariffs,” Mohsen Salehinia was also quoted as saying by the news portal of Car.ir.
“In the past, when cars were imported, the customs tariff started from 40% and rose to 75% based on the capacity of car engines. Next year, car import tariffs are expected to remain the same,” he added.
Salehinia noted that companies or individuals allowed by the government to import cars will be subjected to technical regulations, as the government is not undertaking car imports.
“Usually, companies that intend to import cars must have the prerequisites for providing sales and after-sales services, as well as for supplying the parts needed. Therefore, companies that can meet these criteria will be allowed to import the permitted cars,” he said.
Asked whether domestic automakers would be allowed to import, the deputy minister said, “Earlier, some domestic automakers in the private sector and the two major automakers were allowed to import a limited number of cars. Therefore, in the current situation, if they can also meet the above-mentioned criteria and seek to import, they can import passenger cars.”
Salehinia also said the value of imports in previous years averaged $20,000-22,000 per car, meaning about $1.4 million would be spent on car imports next year.
“There has never been a restriction on car imports to support domestic production. In recent years, we faced difficulties due to international restrictions on foreign exchange transfer for the import of essential goods or other products,” he added.
