The production of commercial and heavy vehicles increased while other segments registered a decline in the fiscal 2021-22 (ended March 20), such that vans registered the highest growth and buses accounted for the biggest decline.
The production of pickup trucks as the lightest commercial vehicles decreased by 1% in the fiscal 2021-22 to reach 79,751.
The share of Iran Khodro Company (IKCO) in this sector reached 672 units, which shows a fall of 76.8% year-on-year, according to Donyaye Khodro.
SAIPA also produced 60,328 pickup trucks last year, registering a YOY decrease of 4.1%.
Experts believe that pickup truck customers need a more efficient and affordable domestic model more than ever to replace the old products, as foreign models are expensive and beyond the purchasing power of customers.
The cumulative output of trucks, vehicle pullers and semi-trucks hit 12,382 vehicles in the fiscal 2021-22, registering a 112% growth year-on-year.
IKCO had a share of 5,357 units in the production of these vehicles, which shows a growth of 85% year-on-year.
SAIPA produced a total of 1,092 trucks, vehicle pullers and semi-trucks, up 117.5% compared to the previous year. Although this sector has the largest increase in production, the domestic output still does not meet the needs of the market.
Automakers produced only 674 buses in the fiscal 2021-22, which shows a decline of 28.8% compared to the previous year. This is while the production of minibuses and middle buses grew by 35.4% year-on-year and reached 1,074 vehicles.
In this sector, IKCO succeeded in producing 617 minibuses, middle buses and buses, which show a growth of 115.7% compared to the previous year’s output.
Vans, however, as light commercial vehicles, had the highest production growth in the fiscal 2021-22. It totaled 1,168 units, which shows a growth of 354.5% year-on-year.
IKCO also recorded a growth of 299% in this field by producing a total of 383 vans during the period. The automaker's competitor, SAIPA, also recorded a 356% growth by producing 356 vans in the fiscal 2021-22.
Automotive Challenges Decoded
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 also 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, allows the government to regulate the market and provides 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 nuclear talks that are underway in Vienna, Austria, between Iran and six world powers) to increase customer satisfaction.
Anvari noted that if the quality of domestic cars were on par with that of foreign cars, the former would have an edge because of the access to after-sales service, cheaper parts and services.
