New Auto Standards Coming Into Full Swing

Facing harsh criticism from the public and prompted by a deadline set by authorities, Iranian automotive companies have been pushing ahead with plans to upgrade the quality of their models.

With the late-June deadline imposed by the Institute of Standards and Industrial Research of Iran passing, 16 vehicles have met the qualitative criteria laid down by the organization on schedule.

Car manufacturers were compelled by the ISIRI to enforce 63 new standards by June 22 or face production suspension, local automotive website Asbe Bokhar reported.

During an interview over the weekend, the head of the ISIRI, Nayereh Piroozbakht, said 16 vehicles have successfully passed the required tests in due time. The names of the models are yet to be disclosed. According to the latest data released by the Ministry of Industries, some 50 models currently roll out of Iranian carmaker factories.

In recent years, ISIRI has pushed for the implementation of upgraded automotive standards known as the Islamic Republic Car Assessment Program (IRCAP).

The system is scheduled to come into full force by January 2019 and will include new regulations with the total number of automotive standards reaching 85.

The first phase of the scheme went into effect in January 2018 when the production and import of 25 models were banned as they had not reached the first 61 conditions established by the institute.

Among the 25 vehicles which failed to comply with the required standards at the time were the Hyundai i10, Liffan X50 and X60, sedan MVM 315, Tiggo 5, and Peugeot Pars with XUM engines.

The second phase came into force over two weeks ago as two new criteria were added to the previous 61, bringing the total number of standards to 63.  The requirements implemented in this phase mostly revolved around fuel efficiency.

While no announcement has been made on how many cars face production halt with the enforcement of the second phase, Piroozbakht earlier in April told ISNA that production of two models would certainly need to be ceased when the second phase of the scheme takes effect.

The third and last phase is set to be enacted by January 2019, adding 22 more criteria and obligating car manufacturers to comply with 85 standards.

 Tenacious Policymaker

Piroozbakht has always been praised by observers as a staunch advocate of upgrading automotive standards.

In recent weeks with United States’ underhand move to pull the country out of the historic Iran nuclear deal, which has cast a shadow of uncertainty over Iran’s automotive sector, many have speculated that soon the ISIRI and its chief will be forced to abandon their stance that outdated vehicles which spew poison into the air and flout safety standards need to go.

However, in the face of the looming hardships, striking a defiant note, Piroozbakht made it clear that sanctions or the government’s recently introduced ban on car imports “will in no way soften the ISIRI’s stance.”

Following US President Donald Trump’s pullout from the 2015 Iran nuclear deal in May, which heralds restoration of draconian sanctions, the dollar exchange rate hit unprecedented levels, diminishing foreign currency reserves and forcing the government of President Hassan Rouhani to place a ban on commodities with similar local counterparts, including cars. The move has removed any form of competitiveness from Iran’s auto market, with customers being left with no options but to buy Iran-made cars or going for second-hand vehicles.

Furthermore, Trump is set to impose new sanctions against Iran and firms that have ties with the country. This has also forced international carmakers to put their collaborations with Iranian carmakers on hold or downsize their operations in the country.

Altogether the headwinds have pushed Iran’s automotive sector into a hiatus, plunging some plans in bottomless pits of uncertainty. The combination of these factors has triggered many to speculate that ISIRI will be forced to scrap its acclaimed standardization agenda.

Alleviating the concerns, the head of the ISIRI says, “We certainly will not back down. We will not give ground. What matters to us foremost is the public’s safety and health.”

 Non-Negotiable  

While Piroozbakht is steadfast in implementing the new automotive requirements and forcing carmakers to fall into line, she has not failed to recognize the hardships that the sector is certain to face in the coming months.

She says, “When it comes to secondary standards, we are willing to give some wiggle room to manufacturers.” However, the head of the ISIRI points out that standards related to safety measures are non-negotiable and any vehicle which fails to reach the required level of safety must become a thing of the past.

According to the World Health Organization’s 2014 report on road safety, Iran has the highest number of deaths caused by road accidents in the world. The report suggested that 43.5 people out of 100,000 are killed in road accidents in Iran.

Every 19 minutes, one person dies on Iran’s roads and every two minutes people will hear that one of their family members has survived a crash but with serious injury and perhaps lifelong disability.

Furthermore, the ISIRI is currently negotiating with the Industries Minister over the details of the extent of flexibility the institution is willing to show toward carmakers.

Piroozbakht further noted that ISIRI is well aware that due to the imposition of upcoming sanctions, some auto parts cannot be imported from sources which were frequently used in the past. The organization with the Industries Ministry’s collaboration is working on channels to enable carmakers to overcome the upcoming hurdle as well. She did not elaborate further.