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IRICA reports 12-fold increase in car imports
According to IRICA, the development came to pass since foreign currency was allocated for car imports, reported IRNA.
It added that 25,448 new passenger cars valued at over $ 525.04 million were cleared and imported to Iran from March 20 to October 31.
In the same period last year, 2,999 new passenger cars worth over 60.4 million were imported, the report said.
The Iranian auto industry has a history of more than half a century, with a sizable industrial and employment base involved in assembling foreign brands.
French automakers and their peers, however, stopped supplying vital components to Iran as the US sanctions kicked in, targeting the Islamic Republic’s key industries including cars.
The immediate impact was a sudden surge in car prices amid a widespread shortage of crucial parts, but it also became a raison d’être for survival as Iran’s auto industry fought to pull together a remarkable spirit of economic resilience against the sweeping American sanctions.
Iran’s defense industry stepped in to produce some crucial components, such as airbags and electronic control units, while a nascent auto parts industry emerged out of the need for new cars.
Experts believe this is the missing link which had been overlooked for too long. They cite the world’s biggest car manufacturers such as Germany, Italy, Japan and the US which all have powerful parts manufacturers.
The countries are totally self-sufficient in making parts for their own brand cars and source no component from other countries barring few exceptions, when their imports make more economic sense.
The automotive sector is a strategic industry that includes many upstream and downstream industries. It is the country’s largest sector outside oil and gas that accounts for 10 percent of the country’s gross domestic product and employs some 700,000 workers.
With more than 85 million people and annual output of some $500 billion, Iran is a large market where there is enough potential to become both a car making and parts manufacturing powerhouse at the same time with better planning.
The current auto industry had the full state support and a monopoly on the market which, many critics say, has resulted in a laggard sector with no serious efforts to improve quality despite frequent price hikes. The government also levies hefty customs duties on imports in order to protect the domestic auto industry.
A powerful parts manufacturing sector can help the auto industry improve and prosper. The most important requirement for this, experts say, is the access of parts makers to modern technology and modern machines to increase competitiveness.
They say if the quality of auto parts produced in Iran improves, there are enough markets to export them. Iraq, Afghanistan and Pakistan, with a population of some 300 million people, are some of Iran’s immediate neighbors with a potential market for auto parts.