One of the reasons behind the high tire production cost is the high tariff levied on imported raw materials, which also impacts tire price, a spokesman for the Iranian Tire Industry Association.
“The Ministry of Industries, Mining and Trade should apply the policy of reducing the import tariff on tire raw materials as it can noticeably curb the increase in customs exchange rate and production costs,” Mostafa Tanha was quoted as saying by Khabar Khodro.
“As about 70% of the final price of a tire include the cost of imported raw materials, a 5.5-fold increase in the customs exchange rate enforced on the import of raw materials will greatly impact the price of rubber.”
Tanha added that a 57% increase in labor costs and rising energy bills in factories is also expected to have a big impact on tire production cost and prices.
According to manufacturers' calculations, tire production costs have increased by almost 70% in the past year.
“Despite rising costs, continued production requires more interaction among manufacturers, the supply chain and the government to put the least pressure on consumers, but the fact is that the manufacturer cannot bear the burden of rising costs all the time,” he said.
Noting that the tire industry is distressed, the spokesman of the Iranian Tire Industry Association said the industry has done everything in its power to make its products knowledge-based and most of the tire-making technology that used to be imported is now produced domestically.
“For instance, SUV tires, which are different in structure and formulation from ordinary tires, have been produced with the research and efforts of domestic manufacturers. We have also used nanotechnology to increase the efficiency of our system,” he said.
Tanha stressed that the tire industry needs more support and better planning to become more knowledge-based.
Spare Parts Quality Assessed
Smuggled fake spare parts and substandard domestic parts have a negative impact on the Iranian market and the only way to weed them out is by purchasing standardized and original parts from official agencies, a member of the board of directors of the Association of Homogeneous Propulsion Industries and Component Manufacturers said.
“A clear, codified and supervised system and customer awareness of brands, warranty and guarantee will make buyers confident of the quality of parts and ensure their reasonable lifespan,” Yusuf Haqiqi added.
Three types of spare parts are available in the domestic market. Some parts are produced under the supervision of the Institute of Standards and Industrial Research of Iran, some are supplied by private domestic operators and the rest is shipped in legally or illegally.
Imported parts made by authorized manufacturers are of high quality, while smuggled fake parts have low quality.
The automotive expert noted that the parts used by a domestic automaker in the production line and distributed with the same standard and quality through the sales network and its agencies, or through companies such as SAIPA Yadak and ISACO are of reasonable quality.
“Many parts comply with mandatory standards set by ISIRI. Domestic parts manufacturers have independent sales networks and agencies in different provinces across the country, through which they sell their products. But the spare parts market also has a number of sub-manufacturers that are not approved by the automakers, meaning they do not have a contract with the automaker and are not required to meet quality requirements,” Haqiqi said, adding that these spare parts have a lower quality and price compared with the parts supplied by automakers.
Imported parts also enter the market in different forms and under diverse brands. Unfortunately, low quality and cheap imported parts are sold in fake domestic packages or as original parts.
“Frequent visits of car owners to repair shops due to defects and low quality of parts are mainly due to substandard parts and poor quality imported parts,” he said.
“Some buyers purchase cheaper parts that may impose higher costs on repair and replacement of defective parts by repairers and battery makers in the future.”
Haqiqi stressed that it is assumed that the standards and quality of spare parts are checked during the import process, while unfortunately in many cases this does not happen and low quality parts are supplied by repair shops and stores, which give rise to consumer dissatisfaction.
