Former Saipa CEO Appointed Ministry Advisor

Former Saipa CEO Appointed Ministry Advisor
Former Saipa CEO Appointed Ministry Advisor

Industries Minister Mohammad Reza Nematzadeh has appointed former Saipa CEO, Saeed Madani, as his first automotive advisor in an official letter, IRNA reported on Tuesday.

“Madani is well experienced in the automotive industry and the sector can develop further and on international levels with his assistance,” the letter reads.

 Late in May, Mehdi Jamali, formerly CEO of an IKCO parts subsidiary, replaced Saipa’s outgoing CEO. Madani, former CEO of the country’s second largest automotive group held the position for three years.

Madani’s expertise was said to be mainly in technical and mechanical matters. Saipa, however, “had been grappling with financial troubles and to address the issue, a change in management was inevitable,” Reza Norouz-Zadeh, head of the board of directors of the Industrial Development and Renovation Organization of Iran, said.

At the inauguration ceremony of Saipa’s new CEO, Madani had warned that “Saipa is in dire straits,” while blaming the company’s poor management during the two terms of former president Mahmoud Ahmadinejad as the main ill that had crippled the industry.

Leaving the position, Madani noted the company could benefit from the vim and vigor of a younger management.

Saipa is not the only company suffering in the auto sector. Auto part makers are also finding it difficult to deal with financial pressures as vehicle manufacturers have not been paying their debts.

Aside from Saipa, Iran Khodro Company (IKCO), the country’s largest auto manufacturer, has also been producing vehicles with insipid designs due to lack of funding.

Furthermore, mandatory price fixation as opposed to formulating auto pricing schemes based on supply and demand has disrupted the local auto market.   

After economic sanctions intensified on Iran due to its nuclear energy program, most European auto manufacturers, including PSA Peugeot-Citroen and Renault left Iran despite the fact that their contracts had not ended. This, in turn, resulted in a flooding of the Iranian market with cheap Chinese vehicles and the grey import of luxury cars increased.    

Whether Madani, in his new position, will be able to help tackle any of the multiple crises that cripples the auto industry is yet to be seen.