Economy, Auto

Auto Parts Exported to 40 Carmakers

Auto Parts Exported to 40 CarmakersAuto Parts Exported to 40 Carmakers

Iran's car parts produced domestically are of high quality, said a member of the Auto Parts Manufacturers Association.

According to Farhad Behnia, $177 million worth of parts were exported from Iran in the last Iranian year (ended March 19, 2016) to 40 carmakers.

The official made the statements at a press conference, but did not mention the names of the global carmakers, Mehr News Agency reported.

Behnia added that car parts are also exported to neighboring countries, including Iraq.   

He further clarified that the parts makers that do not export might have been instructed to do so by the major corporations they work with, and "have not been limited from our end".

Behnia explained the quality checking process executed in different stages.

The parts are first checked at the production line and while they are assembled. Next, at the time of dispatching the parts to carmakers, while they are used in the assembly lines and a final check is executed by agents appointed by the Ministry of Industries, Mining and Trade.

Behnia added that if auto parts manufacturers do not comply with the standards and a fault is found, they will be heavily fined.

What's certain is that the producers would not want to be fined for using faulty parts, "as they have to pay up to 20 times the part's price as fine".

"Some parts, of course, are faulty, but what is certain is that this may apply to less than 1% of all parts," he said.

The official clarified that when western sanctions were intensified on Iran over its nuclear energy program, the ministry did not want to modify its production goals, therefore monitoring procedures declined while automakers were forced to use low-quality parts.

 All this affected the overall quality of cars and this problem, to some extent, persists.  

However, at present, the monitoring process has been intensified, which compelled the firms to up their game.

Behnia highlighted the fact that as the death penalty payouts (blood money), third-party insurance premiums and steel sheet prices, among other things, have escalated, these factors should also affect the price of cars.

On the other hand, the market is not ready for a hike in car prices. In light of these facts, Behnia projected that if the government does not exempt automobiles from the official pricing policies, auto parts manufacturers will suffer heavily.

This issue is also one of the major problems facing foreign auto manufacturers planning to start joint ventures in Iran and need to be addressed.