An automotive expert believes exports will help improve the quality of parts and boost their manufacturing industry.
Recently, the Institute of Standards and Industrial Research of Iran obliged automakers to procure parts only from manufacturers with export licenses, as exports create a competitive environment and help improve the quality of parts.
“Some parts manufacturers can produce parts that are suitable for export, and for some, the mechanisms have not yet been provided, one of the reasons for which is the weakness in global interaction and the challenges of currency transfer,” Saeed Madani, a former CEO of SAIPA Automotive Group, was quoted as saying by Khabar Khodro.
Currently, domestic auto parts are produced for older models and the output of new cars has not yet reached a level that would make parts production cost-effective.
“On the one hand, it is possible to export common parts such as batteries, tires and filters to the countries of the region. On the other hand, the limited volume of parts export is due to limited international interactions and the fact that these parts are mainly manufactured for domestic vehicles,” he said.
“If investment is extended to domestic parts manufacturers for receiving large orders, these manufacturers can produce and supply parts needed by foreign car manufacturers, although one of the requirements for this issue is the establishment of proper political relations with the world.”
Stating that domestic component manufacturers are classified into A, B, C and D grades, he clarified, “Some parts manufacturers cannot pass the standards of automobile manufacturers and should improve the quality of their products. Also, the products of a component maker may be counted as Grade A, while they are not suitable for export.”
The former CEO of SAIPA stressed that car manufacturers are always trying to upgrade their parts, but export is not pursued by parts manufacturers.
“About 2,000 parts makers are active in the country and each car factory works with about 700 to 800 parts makers. This is while investment opportunity is not available for many component manufacturers, due to the country’s limited international relations. As a result, these component manufacturers are not ready to export their products,” he said.
Madani said domestic auto manufacturers can give special privileges to parts manufacturers that have export licenses and grant them a superior grade.
Commenting on the impact of exports on the prices of domestic parts, Madani said, “Exports do not influence the domestic parts’ prices, as the price of exported part in the foreign market is different from the domestic market price. In addition, the volume of exported parts is not so large to impact the domestic sale prices.”
Car Filter Import Ban Lifted
The two-year ban on importing car filters has been lifted, secretary of Iran’s Filter Manufacturers and Exporters Association announced.
Ali Soleimani also told Donyaye Khodro that filters can be imported on condition that they are bought directly from the manufacturing countries and approved by the Iranian Filter Association.
“Filters should be bought from countries with high technologies in the field, such as Germany, Italy, Japan and South Korea,” he added.
Referring to the ban on filter import due to the production of similar products in Iran, he said when car filters’ import was not restricted, some profiteers imported fake products from Asian countries in the name of European and South Korean products and sold them as genuine components.
As this harmed domestic industries, filter imports were banned and traders were only allowed to import products that did not have a domestic counterpart.
"When import registrations are made with the Ministry of Industries, Mining and Trade, they will be examined by the association and approved if the components are required domestically," he said.
"Car filter import from countries [other than those mentioned], such as the UAE, China, etc., still remains prohibited."
Soleimani stressed that all the official filter manufacturers of Iran favor the lifting of import ban because the presence of high-quality and original products from reputable foreign car manufacturers will create competition and lead to the improvement of the country's filter industry.
The official said the tariff for importing the products of reputable companies is clear and the association will only grant an import permit if the filter is authentic.
He also warned against the production of seemingly foreign filters with the permission of unrelated unions and said: "Don't be deceived by the fancy packaging of car filters that are sold as original products for use in imported cars. All of them are fake and produced in underground workshops, or workshops licensed by unrelated unions."
Soleimani noted that in the last two years ending Aug. 29, the import of all light and heavy vehicle filters to the country was banned.
"Accordingly, there is no officially endorsed foreign product in the market and all the products sold as original filters with foreign packaging in the market are counterfeit and of poor quality, and they are either produced in underground workshops or smuggled into the country,” he said.
