The policy of domestic car manufacturers changed this year from increasing turnover to completing cars with parts deficit, Saeed Madani, the former CEO of SAIPA, said.
Automakers managed to complete most cars, but it resulted in a decline in production.
“Car manufacturers claim that in the future, they will not produce incomplete vehicles. Apparently, the production process has improved, but I don't think car manufacturers will be able to compensate for the low turnover of last year in the remaining six months of the current year,” Madani was also quoted as saying by Khabar Khodro.
Major carmakers set a goal of producing 1.4 million vehicles by the end of the current fiscal year (March 2023), but statistics indicate that these companies only produced about 500,000 new cars that are far from their goal.
“In the first three to four months of the current fiscal year, the implementation of the plan to complete cars with parts deficit caused a decline in production, as carmakers used parts allocated for daily production,” he added.
The former CEO of SAIPA stressed that the country’s production capacity should be increased to compensate last year’s low turnover.
“Calculations indicate that car manufacturers need a 50-60% increase in turnover to achieve the goal of producing 1.4 million vehicles this year. But because in the first six months of the year, the increase in turnover was not in accordance with their plans, carmakers should boost their monthly production by 90%. In other words, carmakers should double their production,” he said.
Madani estimated that carmakers can only produce about 1 million vehicles by the end of the year.
Vehicle Production Grows 10%
The number of total vehicles (including heavy, commercial and passenger cars) produced in the five months ending Aug. 22 has increased by 10% compared with the same period of last year, the head of Automotive Industry Office announced.
“A total of 422,078 vehicles were produced in the first five months of the current fiscal year [March 21-Aug. 22], registering a 10% growth year-on-year,” Abdollah Tavakkoli Lahijani was also quoted as saying by Donyaye Khodro.
“Statistics concerning the production of all types of vehicles in the five months indicate that the car industry has stabilized in the country.”
Van production amounted to 806 vehicles during the period, up 806% compared with 124 vehicles in the previous year’s corresponding period.
The production of mini trucks, trucks and vehicle pullers surged by 176% to stand at 9,678 vehicles from 3,512 vehicles in the same period of last year.
The output of pickup trucks reached 40,800 vehicles, registering a 46% YOY growth compared with last year’s 27,925 vehicles.
Bus and minibus production stood at 746 vehicles, showing a rise of 12% from last year’s 669 vehicles.
Also, passenger car output hit 370,048 during the period under review, registering a 6% rise compared with 350,261 cars in the previous year’s corresponding period.
In the Automotive Industry Transformation Exhibition held last month in Tehran, manufacturers unveiled their latest achievements in the form of concepts and prototypes, in cooperation with the Ministry of Industries, Mining and Trade.
The strategic alliance of car manufacturers in the joint use of some domestic production platforms and sites, Iran Khodro's use of SAIPA's research center, SAIPA's employment of Iran Khodro's driving forces, integration of after-sales service and assistance networks, cooperation in the production of electric cars and synergy related to logistics, transportation and supply chain were the main results of the ministry’s initiatives concerning domestic automakers.
Cooperation of Two Major Carmakers
Industries, Mining and Trade Minister Reza Fatemi-Amin recently unveiled a new domestic economy car at this expo.
According to the minister, Iran Khodro and SAIPA, the two major Iranian automakers, will cooperate in the production of the economy vehicle, which currently has not been named, in the sixth fiscal month (Aug. 23-Sept. 22, 2023).
This economy car is a Class A vehicle with a maximum horsepower of 70-75, a maximum engine torque of 90-100 Newton meters and a distance of 2,430 mm between its two axles, Tejarat News reported.
According to the preliminary announcement, the car will resemble SAIPA’s QUIK, be priced under 2 billion rials ($6,745) and roll out in the second half of the next fiscal year that starts on March 21, 2023.
In the last few years, the prices of domestic cars have skyrocketed to such an extent that they have become unaffordable for most people and the low quality of these high-priced cars also triggered the criticism of the Islamic Republic of Iran Police.
Despite their unreasonably high prices, domestic vehicles are in demand, as the purchases are made with the intention of making investment for earning a quick profit.
