Automotive spare parts topped the list of smuggled goods in the fiscal 2021-22 (ended March 20), according to Spokesman of Headquarters to Combat Smuggling of Goods and Foreign Exchange Hamid Reza Dehqani-Nia.
He announced that $17.1 billion worth of smuggled goods entered the country in the fiscal 2020-21.
The spokesman noted that after car spare parts, food was the second largest category of contraband last year, while computer equipment and home appliances respectively ranked third and fourth in the fiscal 2021-22, the news portal of Iran’s Chamber of Commerce, Industries, Mines and Agriculture reported.
According to Dehqani-Nia, many household appliances in the Iranian market are counterfeit.
"These products are Iranian goods painted or repaired in unofficial workshops and sold in the domestic market as foreign and banned brands," he said, without mentioning the value of smuggled car spare parts.
Mohammad Reza Najafi-Manesh, a member of the Tehran Chamber of Commerce, Industries, Mines and Agriculture and chairman of the Association of Homogeneous Propulsion Industries and Component Manufacturers, said although it is stated that car spare parts topped the list of smuggled goods, it is not clear how much was smuggled into the country and how many were produced by underground and unofficial domestic units.
“The problem with evaluating this volume of smuggling is that it is not clear how much of these goods were imported and how much was produced illegally. In other words, if a product is found to be illegal, it may have been smuggled into the country, or illegally produced by unlicensed units inside the country.”
Najafi-Manesh noted that another problem is that the size of the spare parts market in Iran is not known.
“Therefore, it was decided that ISACO, SAIPA Yadak and the Association of Homogeneous Propulsion Industries and Component Manufacturers cooperate to examine the volume of the spare parts market and determine how much of it is domestic and what percentage comprises counterfeit production and smuggling,” he added.
In the field of auto parts, domestic car batteries and tires were obliged to have ID and tracking codes, and it was decided that 55 other commodities produced by 173 domestic companies would receive ID and tracking codes.
Najafi-Manesh noted that Iran has 1,500 car component and spare parts producers.
Car Component Makers Worse Off
The condition of car component makers is worse than it was last year, a member of the Association of Homogeneous Propulsion Industries and Component Manufacturers said.
“Their financial situation, which depends on the payment situation of car manufacturers, has created conditions worse than that of the previous fiscal year,” Yousef Haqiqi was also quoted as saying by the news portal of Donyaye Khodro.
"The automotive industry was expected to receive credit facilities worth 100,000 billion rials [$326 million] to help boost their liquidity and turnover, but this did not happen,” he added.
Haqiqi stressed that the president's order to increase production was also supposed to help the car industry, but so far nothing has happened.
“Due to the increase in the prices of raw materials compared to last year, there is a need for a 100% increase in liquidity to materialize these plans. This is while we are approaching the end of the first quarter and there is no news about this,” he said.
“Iran Khodro’s production plans in the current fiscal year have undergone more changes than SAIPA’s plans.”
A plan to increase production to 1.5 million vehicles was floated this year and automakers were asked to double production.
While the financial outlay for this initiative has not been defined, the Industries Ministry announced a change in approach whereby incomplete cars will no longer be produced and ordered automakers to complete the cars deficient of parts.
With this measure, the production of new cars declined, according to market players and managers of automotive and parts industries.
According to car parts managers, automakers cannot continue their purchase from parts manufacturers because of their mounting debts.
While the government has stopped the allocation of subsidized foreign currency for the import of essential commodities such as wheat, animal feed and oilseeds, automakers are pushing for the liberalization of the prices of substandard cars that are already being sold at exorbitant prices in the monopolized domestic market.
15 ISIRI Quality Directives
To improve the quality and safety features of domestic cars, the Institute of Standards and Industrial Research of Iran has obliged domestic automakers to follow 15 directives, according to Mehdi Eslampanah, the head of ISIRI.
In case of any discrepancy in the final product vis-à-vis standards, or noncompliance with ISIRI’s directives, automakers will be liable to pay criminal and legal fines.
According to the first directive of ISIRI, a car manufacturer needs to submit a declaration showing a vehicle’s conformity with the features declared by the automotive company to ISIRI at the time of seeking the production permit.
According to the second directive, if the interval between the car production and its supply to dealerships is more than two months, carmakers are obliged to inspect and verify the good condition of rubber, plastic and polymer parts, batteries, body dents and other components, the news portal of Donyaye Khodro reported.
The third directive states that automakers should notify ISIRI of any modifications that affect the compliance of the product with the relevant national standards.
According to the fourth directive, in case of non-fulfillment of obligations and any harm arising from this is suffered by the people at present or in future, manufacturers must pay compensation.
The fifth directive requires car manufacturers to control the production process and ensure the good quality of raw materials and the final product in accordance with related standards.
According to the sixth directive, automakers must strictly refrain from undertaking the presale and advertisement of cars before obtaining the oversight body’s approval.
The seventh directive mentions that automakers are allowed to conclude contracts and use certified inspection companies with the authorization of the institute.
In the eighth directive, automakers are obliged to use a technological system with the ability to help track the product’s QR code for public monitoring and if any violation is reported, they are obliged to remove the discrepancy.
According to the ninth directive, automakers should procure the required parts and systems in compliance with mandatory standards only from the holders of the standard license.
In the 10th directive, automakers are required to comply with technical standards in accordance with factory standards for other parts and systems that do not have a national standard and to maintain records of each part and submit them at the request of the institute.
According to the 11th directive, car manufacturers should implement corrective measures related to the elimination of recurring defects reported in periodic evaluations and prevent their presence in subsequent evaluations.
According to the 12th directive, car manufacturers are obliged to establish a quality management system and employ a quality control manager certified by ISIRI, in accordance with their production lines and shifts.
According to the 13th, 14th and 15th directives, they are responsible for establishing a quality management system, enforcing after-sales service standards and start implementing suspended standards.
