Economy, Business And Markets

Investment Opportunity: Airbag Production

Investment Opportunity: Airbag ProductionInvestment Opportunity: Airbag Production

More than 1.13 million cars were locally manufactured in the last Iranian year (ended March 20, 2015), but only 150,000 airbags were produced in the same period, says an expert of auto parts industries.

Gholamali Talebi added that most domestically produced airbags were installed on Tiba, Peugeot 206, Peugeot Pars, Samand and Dena models.

“A handful of airbag producers are active in Iran and the country imports most airbags from South Korea, Japan and Germany,” Forsat-e Emrooz daily quoted him as saying.

An airbag is a vehicle safety device, a type of occupant restraint system that consists of a flexible fabric bag, also known as an airbag cushion. The airbag module is designed to inflate rapidly and quickly deflate during a collision or impact with another object or a sudden deceleration to keep passengers from contacting the steering wheel, dashboard front glass and other parts of the automobile. Airbags are key components in automotive safety systems.

Asked whether airbag production in Iran is economically viable, Talebi said, “We are in abundant possession of oil, so we can succeed in making all petroleum products. In fact, it is easy to make airbag cushions. But there are crash sensors that must be connected to an onboard computer to detect a frontal collision and trigger open these bags. We do not have the knowhow of making these sensors that are mostly imported from China.”

“The technical knowhow of manufacturing airbags should be acquired,” says chairman of Auto-Parts Manufacturers Association, Mohammad Baqer Rejal.

“The top world-class manufacturers of airbags don’t put the technical know-how at the disposal of other countries. Even if they do, a part of the raw materials has to be imported.”

Factors such as adoption of safety regulations by governments and the increase in vehicle sales and safety installations will accelerate the demand for automotive airbag.

Alireza Nikaeen, chairman of Tehran Auto Mechanics’ Association, said not all Iranian cars are equipped with airbags.

“Even Iranian carmakers offer airbags as an option, whereas some international manufacturers install up to six airbags on their vehicles. Ford’s EcoSport is equipped with front and side airbags for the driver and front seat passenger and side curtain airbags for front and rear seats. If the law makes the installation of airbag in all vehicles mandatory and requires car manufacturers to comply with standards, demand will definitely rise. This will also open up new investment opportunities in the field.”

MarketsandMarkets, which is a global market research and consulting company, has predicted that the value of global airbag market would reach $23.6 billion by 2019.