The Ministry of Industries, Mining and Trade plans to meet car demand by placing imports and higher production on its agenda, the head of the ministry’s Automotive Industry Office said.
“In the current fiscal year [March 2022-23], 1.6 million vehicles will be produced, of which 1.4 million will be based on domestic platforms. Increasing the production is the most important short-term strategy, provided sanctions don’t trigger new developments,” Abdollah Tavakkoli Lahijani was also quoted as saying by IRNA.
The official noted that rising car production will help eliminate car lotteries, such that the lottery for SAIPA’s Shahin has been cancelled.
“Iran’s two largest automakers are now working to produce economy cars and a consortium of component makers has been formed to assist the initiative,” he said, while pointing out that supply chain financing will reduce the automakers' overhead costs.
Lahijani said promoting direct purchase from top-tier manufacturers, designing new cars, reducing logistics, increasing cooperation between carmakers and forging synergies could prepare the ground for the rapid production of economy cars.
“Automotive standards are not difficult to uphold and they are being observed in the new platforms,” he added.
The new platforms have been designed in a way that the enforcement of standards help lower prices when mass production of cars begins.
According to the official, the Trade Promotion Organization has studied potential export markets and the vehicles built on the four main platforms will be exported to target countries.
“The Fourth Industrial Revolution has helped develop the automotive industry with the expansion of the four major fields of electrification, connected cars, self-driving cars and shared transportation,” Lahijani said.
“At every turn, some new actors emerge and for countries like Iran and domestic automakers, this is a historic opportunity to have a say with the help of knowledge-based companies.”
Conditions for Elimination of Car Lotteries
Iran Khodro Company has announced that it will end the much-criticized car lotteries if the company’s two conditions are met.
“An increase in production and supply, and the elimination of command pricing are two important conditions for the company to eliminate car lotteries from the process of selling vehicles,” Babak Rahmani, the spokesman of Iran Khodro Industrial Group, was also quoted as saying by the news portal of Car.ir.
“The annual demand of the Iranian car market is 1.2-1.5 million vehicles and IKCO plans to produce 750,000 units, including 25,000 heavy vehicles and 725,000 passenger cars,” he added.
The spokesman noted that the increase in supply is only reason for eliminating the lottery, which will take place gradually in the second half of the current fiscal year (started March 21).
Regarding the 400 million-rial increase in the price of bi-fuel Samand, he said, “For more than a year, bi-fuel Samand has not been produced or sold and is only used for taxis, so the increase in its price is not subjected to any special rules.”
Rahmani implicitly acknowledged that the pricing of bi-fuel Samand solely rests on the whim and fancy of IKCO.
"In the concluding two months of last year, compared to the previous 10 months, we had a 17% increase in supply and more than 120,000 units were supplied, of which 68,000 vehicles were delivered to customers,” he said.
“Therefore, the increase in car prices has not been caused by a lack of supply and factors such as inflation expectations for the fiscal 2022-23. The price hike is due to foreign currency prices and the cancellation of imports of parts.”
This flies in the face of earlier official claims that the so-called national car Samand is wholly produced domestically.
Referring to the import of 13 Benz E200 passenger cars by a subsidiary of Iran Khodro six months ago, the IKCO spokesman said, “The company is the exclusive importer of Mercedes-Benz cars and the company’s shares [held by Iran] belong to Iran Khodro. The company’s orders were registered before the import ban was approved.”
“Before the sanctions, the dealership was under the supervision of Mercedes-Benz and 756 units were assembled in Iran, and we received this permission directly from Mercedes-Benz to produce Benz cars by Tejarat-e-Setareh Iran Company, but after the sanctions we could not continue this cooperation,” he said.
"The transfer of knowhow from Benz Company was only undertaken by Tejarat-e-Setareh Iran Company and currently, the company is applying to register a knowledge-based company with the Vice-Presidency for Science and Technology."
Rahmani said the import of cars helps car manufacturers, because experience has shown that domestic manufacturers produce more vehicles when there are car imports.
