Smuggled fake spare parts and substandard domestic parts have a negative impact on the Iranian market and the only way to weed them out is by purchasing standardized and original parts from official agencies, a member of the board of directors of the Association of Homogeneous Propulsion Industries and Component Manufacturers said.
“A clear, codified and supervised system and customer awareness of brands, warranty and guarantee will make buyers confident of the quality of parts and ensure their reasonable lifespan,” Yusuf Haqiqi was also quoted as saying by Khabar Khodro.
Three types of spare parts are available in the domestic market.
Some parts are produced under the supervision of the Institute of Standards and Industrial Research of Iran, some are supplied by private domestic operators and the rest is imported legally or illegally.
Imported parts made by authorized manufacturers are of high quality, while smuggled fake parts have low quality.
The automotive expert noted that the parts used by a domestic automaker in the production line and distributed with the same standard and quality through the sales network and its agencies, or through companies such as SAIPA Yadak and ISACO are of reasonable quality.
“Many parts comply with mandatory standards set by ISIRI. Domestic parts manufacturers have independent sales networks and agencies in different provinces across the country, through which they sell their products. But the spare parts market also has a number of sub-manufacturers that are not approved by the automakers, meaning they do not have a contract with the automaker and are not required to meet quality requirements,” Haqiqi said, adding that these spare parts have a lower quality and price compared with the parts supplied by automakers.
Imported parts also enter the market in different forms and under diverse brands. Unfortunately, low quality and cheap imported parts are sold in fake domestic packages or as original brands.
“Frequent visits of car owners to repair shops due to defects and low quality of parts are mainly due to substandard parts and poor-quality imported parts,” he said.
“Some buyers purchase cheaper parts that may impose higher costs on repair and replacement of defective parts by repairers and battery makers in the future.”
Haqiqi stressed that it is assumed that the standards and quality of spare parts are checked during the import process, while unfortunately in many cases this does not happen and low-quality parts are supplied by repair shops and stores, which give rise to consumer dissatisfaction.
Automakers’ Debts to Parts Producers
Liquidity is one of the main problems in the component manufacturers’ supply chain, as domestic auto producers have piled up huge debts.
The domestic auto industry's debts to parts makers have reached 450 trillion rials ($1.45 billion), according to the association’s member of the board.
Rezaei stressed that the massive debts have built up over the years, such that 120 trillion rials ($387 million) of the total only pertain to the previous fiscal year (ended March 2021).
Noting that parts manufacturing companies employ hundreds of thousands of people, the official warned that if the carmakers are not given a loan, the situation could spiral into a crisis, with many people losing their jobs.
Arash Mohebbinejad, secretary of the association – a lobbying arm of the industry and the official debt collector, said if non-payment of debt can be construed a crisis, the chronically indebted Iranian automakers have perpetually been in crisis mode.
After the previous US administration pulled out of the Iran nuclear deal and reimposed crippling sanctions on Tehran in the summer of 2018, the Iranian auto industry's woes worsened.
With nearly a million jobs at stake, the Iranian government has been more or less supportive of automotive businesses.
Last year, the Iranian government and the Central Bank of Iran ratified an auto industry rescue package worth 100 trillion rials ($322.5 million) to help Iran Khodro Company and SAIPA settle their debts to parts makers and boost production, according to media reports.
Mohebbinejad chastised CBI for not being "helpful", claiming that the funds have not been allocated in full to the automakers yet.
"Parts makers were forced to lay off 150,000 workers after sanctions were imposed," he said, stressing that these people are still looking for a job and the situation may deteriorate if nothing is done soon.
