The global ranking of Iranian automakers has fallen noticeably and experts blame numerous factors for this issue.
“Economy cars produced by domestic producers do not have an acceptable quality, so their production should be stopped. With the import of better economy cars, the low-income and middle classes should benefit from quality cars," Minister of Industries, Mining and Trade Reza Fatemi-Amin was quoted as saying by Doynaye Khodro.
This is not the first time that the poor quality of domestic automotive products has been discussed in the current fiscal year (started March 21), but there seems to be no plan for the production of good quality cars.
Although the current state of the car industry is the result of years of wrong policies adopted by the parliament, the government and carmakers, market players are hopeful that correct policymaking and a management overhaul could improve the condition of cars.
“Various sectors are involved in the Iranian automotive industry. The Industries Ministry, the parliament, the Islamic Republic of Iran Police, the Department of Environment and the Institute of Standards and Industrial Research of Iran are all accountable for the automotive industry’s condition,” Farhad Behnia, spokesman of the Parts Manufacturers Association, said.
“Each of these sectors has tasks that, if performed correctly, would have made the automotive industry much better today than ever before.”
The official noted that in the fiscal 2011-12, Iran ranked 12th in global car manufacturing, but currently it has fallen to 21st place in the world, which is still a good position.
He noted that one of the recent traffic accidents is proof that domestic vehicles lack an acceptable quality.
In the Behbahan-Ramhormoz road accident in Khuzestan Province on Jan. 10, 59 cars were involved in a chain of crashes that killed five and injured 41 people.
Behnia said the police was tasked with preparing an expert report and specifying the year of production of all the cars involved, following which automakers and parts makers were to provide explanations.
“Reports are prepared for such accidents and sent to judicial authorities for a verdict. However, in the Behbahan accident, this did not happen. In such accidents, it must be determined how many cars were dilapidated and should have been scrapped but weren’t,” he said.
“In these reports, cars having non-standard parts should be clarified. But immediately after this incident, everyone took a defensive stand, which is an unprofessional approach.”
According to Behnia, Iran has more than 3 million worn-out cars, which consume almost twice the fuel used by brand-new cars.
“Under the circumstances, we are moving toward the most critical phase of the automotive industry in the fiscal 2022-23. If we continue with the same trend, output will decrease and we will not only be unable to produce 1.5 million units, but we will not even reach the number of cars produced last year,” he declared.
Plans to Meet Car Demand Outlined
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 supplied, of which 1.4 million will be built 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.”
