Domestic production of auto parts to save Iran €300m in a year

July 22, 2020 - 12:57

TEHRAN- Domestic production of auto parts is estimated to save Iran €300 million during the current Iranian calendar year (ends on March 20, 2021), deputy industry, mining, and trade minister for industry affairs announced.

Mehdi Sadeqi Niaraki said that the saving will be achieved through the ministry’s domestic production promotion expert desks between auto part manufacturers and carmakers, IRNA reported.

The official also announced that deals worth €277 million were signed between auto part manufacturers and carmakers in the previous year through three domestic production promotion desks.

In mid-May last year, the previous industry, mining, and trade minister issued a directive on “strengthening domestic manufacturing of imported auto parts”.

Addressing two of his deputies, Farshad Moqimi, deputy for industrial affairs, and Mohammad-Baqer Ali, the board chairman of Iran’s Industrial Development and Renovation Organization (IDRO), Reza Rahmani put emphasis on using the highest potential of human resources for strengthening domestic manufacturing of auto parts which are currently imported to the country.

This movement should be all-out promoted to combat sanctions and also prevent from the exit of foreign currency from the country, the minister noted.

He said the policy of domestic manufacturing of auto parts should be seriously followed up, and in this due the capable manufacturers should be seriously supported.

The ministry has also unveiled a 10-section plan in early February for improving the status of carmakers, in which the two major car makers of the country have been ordered to support auto part manufacturers.

Mentioning this plan, Farshad Moqimi said: “Under the condition when the enemy has put the country’s auto manufacturing industry under the pressure, we should try to reduce our reliance on imports in this sector especially imports of auto parts.”

Moqimi had also stressed that the regulations should be in a way that remove the barriers in the way of domestic production.

“When a regulation is set, it may remove a problem but creates another one. Taking this issue into account and also considering the special current condition of the country, some special approach should be taken when setting the regulations”, the official said.

Following the orders of Industry Ministry, domestic carmakers started a research movement titled “Domestic Manufacturing of Imported Parts”.

The movement is aimed at creating the condition and opportunity for cooperation among domestic manufacturers, knowledge-based companies and startups.

Current year’s 1st domestic production promotion desk meeting held

As announced by the deputy industry minister, the current year’s first domestic production promotion expert desk meeting on auto parts has been held two weeks ago with the aim of saving the country €66 million.

In mid-January, the official noted that the industry ministry’s programs for the promotion of domestic production are going to save $10 billion for the country in the next two years.

Meanwhile, as announced by the secretary of Specialized Manufactures of Auto Parts Association in late December last year, Iranian carmakers have prepared some incentive packages to encourage investment making by the auto parts manufacturers.

Arash Mohebinejad said that offering these incentives is in line with the promotion of indigenizing the manufacturing of auto parts.

Purchasing the domestically-made auto parts at the same price of the similar imported parts and making the purchase guarantee deals with the auto part manufacturers are some of these incentives, Mohebinejad stated.

During a ceremony in mid-February, three Iranian-made cars were unveiled in the presence of President Hassan Rouhani.

Speaking to media on the sidelines of the ceremony, Reza Rahmani said the new cars are 90 percent domestically made and just a few of their parts are imported, the minister said adding that based on the planning underway manufacturing of those imported parts will be indigenized in the present and coming years.

These cars are complying with the world’s modern standards and their fuel consumption is considerably lower than the previously manufactured vehicles, he further emphasized.

As the current Iranian calendar year is named the year of “Surge in Production”, all organizations have prepared plans to materialize this motto.

In Early April, industry, mining, and trade ministry outlined its programs for supporting the domestic production in the current Iranian year.

The seven main axes of the ministry’s plan for the surge in production are going to be pursued under 40 major programs.

Developing technology and promoting knowledge-based industries, development of domestic production in line with the Leader’s stresses on surge in production, managing imports and development of non-oil exports, improving the business environment, development of financing and investment and finally development of logistics were reported to be the seven major axes of the Industry, Mining and Trade Ministry’s works in the current year.

MA/MA

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